Bitcoin's Market Outlook

Cryptocurrency analyst Benjamin Cowen suggests that Bitcoin may have avoided a major decline. In his latest analysis, Bitcoin closed the weekly candle marginally above the critical bull market support band, despite briefly falling below it. This band is regarded as a crucial threshold indicating whether Bitcoin is in a bearish or bullish phase.

Cowen believes that Bitcoin is likely to avoid a more significant retracement as long as it stays above this band. The bull market support band consists of the 20-week simple moving average (SMA) and the 21-week exponential moving average, representing the overall market sentiment.

Historically, Bitcoin has frequently rebounded from this support area during past bull runs, indicating that a correction may be complete and upward momentum could follow. However, Cowen's optimism must be approached with caution, as Bitcoin has exhibited volatility around this band. Wicks that dip below these levels may lead to panic among traders.

While regaining the band is a positive sign for Bitcoin, it does not guarantee a quick recovery. Given the current macroeconomic unpredictability and lower trading volumes, Bitcoin may face resistance in the coming weeks. Moreover, it has struggled to break above key psychological resistance levels, such as $65,000.

Another potential risk impacting cryptocurrencies is the likelihood of the Federal Reserve tightening its monetary policy. Although Cowen's forecast leans bullish, it is essential to remain cautious based on past performance at the support band.

For a substantial rally, Bitcoin must maintain its position above this support band while navigating external market pressures.

This article was originally published on U.Today