Cowen gives a quick but pointed update on Bitcoin closing back below the bear market resistance band and what history says happens next.
Key Points
Key Highlights:
- Bitcoin followed the exact script, rallying above the bear market resistance band briefly, getting rejected at the 200 day moving average, and sliding back below with no follow through
- The 2018 pattern is playing out almost move for move, February low, higher low in late March, lower high in May, and now heading lower into June
- The most likely short term path is a tag of 70K, a brief bounce of a few days, and then a move back down to the February lows
- Once Bitcoin falls back below the bear market resistance band it flips back to resistance, meaning every rally into it is now a potential shorting opportunity not a buying signal
Takeaway Nothing has changed. Bitcoin is doing exactly what it always does in midterm years. The 70K level will likely offer a temporary bounce that fools people, but the real low almost certainly comes later in the year. Patience remains the only strategy that has ever actually worked in this part of the cycle.
