Bitcoin (BTC), Golden Cross Appears... Cowen: "The Real Bottom Isn't Here Yet"

▲ Bitcoin (BTC)

Although Bitcoin (BTC) formed a golden cross, warnings have emerged that on-chain and whale indicators have not yet reached the 'real bottom'.

Veteran trader Benjamin Cowen compared Bitcoin's bullish and bearish cases based on key indicators in a video uploaded to his YouTube channel on September 9 (local time). Cowen stated that he would base his judgment on actual data rather than specific market narratives. In the analysis process, each indicator was divided into bullish and bearish and scored, with bearish leading 9-7 in the interim tally.

On the bullish side, the Relative Strength Index (RSI), long-term holder movements, and the golden cross provided support. The weekly RSI dropped to 26, reaching a level similar to the 2022 low of 25-26, and the monthly indicator also approached past bear market lows. Recently, Bitcoin also formed a golden cross. Cowen cited instances in 2019 and 2023 where a short-term correction followed a golden cross but then rose again, evaluating it as a bullish signal. However, he also pointed out that new lows appeared after the same signal in 2014 and 2015.

Bearish indicators focused on the on-chain domain. The Market Value to Realized Value (MVRV) Z-score fell below 0 at major lows in 2011, 2015, 2018, and 2022, but has not yet dropped to the same level in this cycle. He explained that Bitcoin also formed a bottom after falling below its realized price in past major bear markets, but the same trend has not been observed currently. Trading volume, too, did not show the massive surge seen at major lows in 2014-2015, 2018, and 2022, classifying it as an indicator supporting the possibility of further correction.

Whale movements are also a warning sign Cowen highlighted. The whale activity score surged to levels of 0.8-0.9 at past major bottoms but only reached approximately 0.25 at this low. It rose to about 0.76 in 2018 and about 0.77 in 2014-2015. Cowen assessed that, combining whale transactions, exchange activity, capital inflows, and large holder positions, there was no strong whale accumulation signal at the July low as seen in past final capitulation phases.

The key gateway in price trends is the 50-week moving average. According to the figures presented by Cowen, this moving average was $80,361, and the weekly closing price was $80,360.6, about $0.4 lower. He judged that it should be considered a bearish indicator until a clear upward breakout and subsequent rise are confirmed. Cowen also left open the possibility of further declines in the fourth quarter based on the 4-year cycle and the elapsed time since the peak but stated that he prefers a dollar-cost averaging approach over the second half of a midterm election year rather than a strategy of pinpointing a specific bottom.

[Article Summary]

-Bitcoin showed bullish signals such as a golden cross and a lowered Relative Strength Index, but key on-chain indicators have not yet reached past low levels.

-The whale activity score at this low was only about 0.25, significantly falling short of the 0.8-0.9 levels recorded at past major market bottoms.

-Cowen presented the breakthrough of the 50-week moving average at around $80,361 as a key variable, emphasizing a dollar-cost averaging strategy in the latter half of the year rather than predicting a bottom.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*