Benjamin Cowen, one of the leading analysts in the cryptocurrency world, warned investors in his latest analysis evaluating the Bitcoin ($BTC) and stablecoin market.
Comparing current price movements with those of past cycles, Cowen suggested that Bitcoin has yet to emerge from a bear market and that further declines may be on the horizon.
The analyst described the current market structure as an “unfortunate formation,” highlighting the critical correlation between stablecoin dominance and the Bitcoin price.
In his analysis, Benjamin Cowen examined the total market dominance of leading stablecoins such as USDT and USDC. He noted that stablecoin dominance has formed a very strong bottom pattern over the past two years, arguing that such a long-lasting base is unlikely to result in a false breakout.
According to Cowen, this structure in the stablecoin dominance chart bears a strong resemblance to the long-lasting upward trend seen in the Bitcoin dominance chart in previous years. The analyst states that stablecoin dominance structurally maintains an upward trend, noting that investors’ tendency to move to cash remains high.
Cowen, evaluating the technical outlook for Bitcoin’s price, reminded that $BTC recently experienced a sharp rejection from its 200-day moving average. Highlighting the similarity of this situation to past bear markets, the expert stated the following:
“Bitcoin has been rejected again from its 200-day moving average, just as it was during the bear markets of 2018 and 2022. This wave of rejection coincides with stablecoin dominance briefly falling below the 21-week EMA on a weekly basis before regaining strength. While there is currently a lot of bullish sentiment and calls for new highs in the market, in my view, this clearly indicates that the bear market is continuing.”
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Cowen claimed that Bitcoin’s current price movements perfectly mirror the cycle seen in 2018. Referring to historical data, the analyst summarized the current scenario as follows:
- Just like in 2018, Bitcoin hit a low in February this year and then formed a higher low in April.
- In May, similar to 2018, a local peak was observed at the 200-day moving average, from where the price reversed.
- In the 2018 cycle, following this rejection in May, a sharp decline occurred in June, with prices falling below the February low.
The analyst warned that if history repeats itself, Bitcoin could clear the lows it saw in February in the coming period.
Cowen noted that it’s easy to mock those who expect a decline during bear markets because Bitcoin typically rises slowly and then falls very quickly and sharply, adding, “Many people think the bear market is over, but I don’t think it’s over yet. Even if investors aren’t aware of it, we may be in the early stages of a new breakout wave. Only time will tell.”
*This is not investment advice.
