A widely followed crypto analyst says that Bitcoin (BTC) bulls and bears are about to be destroyed by an incoming fake.
In a new video update, crypto strategist Benjamin Cowen told his 787,000 YouTube subscribers that BTC bulls and bears tended to be “fake” in the year leading up to the Bitcoin halving. Destroyed by the Cross of Death.
Bitcoin’s halving cycle occurs every four years and cuts miner rewards in half. The next one is scheduled for April 2024, making 2023 the year before the halving
Cowan said,
“Starting in the years leading up to the halving, what usually happens, and I’ve said this many times, is that we destroy the shorts and the longs. We destroy both sides so that, by the end of the year, we’re all broken enough — It doesn't matter if you are a bull, or a bear, everyone is going to be destroyed...
Looking at the three years before previous halvings, this is typically what happened. We spoil both sides, which is why I think this will eventually peter out to lower highs.
According to Cowen, the reason both sides are losing is because BTC will witness a death cross that deceives traders and investors. A death cross occurs when an asset's 50-day moving average falls below its 200-day moving average, signaling that the asset may be entering a more pronounced bear market phase.
“What usually happens when [an asset] goes down before a death cross hits is it causes people to sell because they think, ‘Oh, there’s a death cross. That’s a bad thing. And then they sell to the death cross.
But the reason why this is so often a bad strategy is that, by definition, Golden Crosses and Death Crosses are lagging indicators. They are based on moving averages, which are of course lagging indicators...
When you look at the Death Cross and the Golden Cross, what happens in the short term is often the opposite of what you expected in the short term.
The crypto strategist went on to note that in the years leading up to elections, the S&P 500 tends to experience seasonal corrections, which puts BTC into a downtrend for the remainder of the year — regardless of whether the stock market index is rising or falling.
"We also know, and we talked about this in July, that the S&P 500 tends to adjust seasonally in August and September of the year leading up to the election, and what typically happens is that whatever happens to the S&P 500, it's going to be in Putting Bitcoin into a downtrend for the rest of the year.
At the time of writing, Bitcoin is trading at $27,031, having risen slightly over the past 24 hours.
