Bitcoin Faces 2019-like Bearish Pattern Amid Fed Tightening

Benjamin Cowen, a prominent crypto analyst, has issued a warning that Bitcoin (BTC) may be on the verge of repeating a bearish pattern similar to that of 2019. In a recent YouTube video, Cowen shared his insights with his 887,000 subscribers, highlighting a historical correlation between Bitcoin and Federal Reserve monetary policy. This correlation suggests that Bitcoin may struggle to reclaim the bull market support band, which is defined by the 20-week simple moving average (SMA) and the 21-week exponential moving average (EMA).

Cowen attributes this potential bearish pattern to the ongoing quantitative tightening by the Federal Reserve, a policy that was also in effect during 2019. He notes that the drops below the bull market support band in September-December 2019 coincided with the Fed's pivot in monetary policy as the economy showed signs of weakening. Recent predictions of negative GDP in the first quarter of this year, coupled with inflation and tariff concerns, could lead to similar drops in Bitcoin's value.

However, Cowen also suggests that Bitcoin may reclaim the bull market support band if the S&P 500 recovers from last week's significant sell-off. He believes that the best-case scenario for the S&P 500 is that the local low has already occurred, with historical data showing that local lows often occur around mid-March or mid-April. The timing of Bitcoin's potential rally back to the bull market support band will depend on when the S&P 500 finds its local low and begins to show strength.

Cowen's analysis underscores the interconnectedness of Bitcoin's price movements with broader economic indicators and monetary policy. His insights provide a nuanced view of the potential challenges and opportunities facing Bitcoin in the near future. As always, investors should conduct their own research and exercise caution when making high-risk investments in cryptocurrencies or digital assets.