Blockchain
Key Metrics to Watch This Summer
In a recent X sendBenjamin Cowen spoke about the dominance of Bitcoin, explaining its importance in the cryptocurrency market.
For now, the world’s most popular cryptocurrency is at a crossroads. In the coming weeks, it awaits a crucial decision: Will Bitcoin break free from its current resistance and rise above the Bull Market Support Band (BMSB), or will it remain anchored below?
Analyst Benjamin Cowen sheds light on a familiar pattern that emerged in the summer of 2024. This harks back to previous examples.
Historical Parallels: 2013 vs. 2024
Drawing parallels between Bitcoin’s performance in 2013 and 2024, Cowen noted that BTC found a local bottom on July 5 in both years. He suggests that if Bitcoin follows a similar pattern to 2013, it could experience a “left-shifted peak.” In this scenario, BTC would quickly reclaim the BMSB and hold it as support over the next 1-2 months, leading to a rally in Q4.
Historically, Bitcoin tends to peak in Q4 of the post-halving year, which for the current cycle would be 2025. However, Bitcoin may take longer to recover its BMSB this time around, suggesting a slower but steady climb towards its peak.
Bitcoin Dominance Trends
Cowen predicts a strong rally in Bitcoin dominance in Q4, with a potential peak around 60%. He argues that Bitcoin, being less risky than other cryptocurrencies, will likely provide better returns than most altcoins until the Federal Reserve changes course. This outlook highlights Bitcoin’s role as a safer and more reliable investment in the current market environment.
Technical Analysis
Cowen also highlights the importance of Bitcoin’s 2-week Relative Strength Index (RSI). This level will help determine whether Bitcoin is following the patterns of 2013 and 2016, where it found support around these levels, or 2019, where it fell and experienced an intermediate downtrend within a larger uptrend. This analysis provides a technical framework for understanding Bitcoin’s potential paths.
Responding to Cowen, Zia ul Haque agrees with the Q4 rally forecast but expresses skepticism over Bitcoin’s dominance above 58%. He points out that with each cycle, more money is locked up in altcoins, with many investors holding onto them despite market fluctuations. According to Haque, this dynamic could soon lead to a bottom out of altcoins.
The Road Ahead: Summer and Beyond
In summary, Cowen believes that Bitcoin’s future in Q4 2024 depends on its ability to break out of the Bull Market Support Band (BMSB). If it follows the patterns of 2013, 2016, and 2023, Bitcoin could see a strong recovery and rally. However, if it mirrors the trend of 2019, it could continue to struggle.
As the summer progresses, attention will turn to Bitcoin’s ability to break out of current resistance and the factors that will influence its performance in the coming months.
Will Bitcoin history repeat itself or are we in for a surprise in Q4? We’ll have to wait and see.