Crypto Analyst Cowen Warns Of Further Bearish Price Action For Bitcoin

According to a top crypto analyst, Benjamin Cowen, a technical analysis metric could indicate where Bitcoin (BTC) is moving next as the markets are struggling to recover.

Benjamin Cowen said in a recent video update to his YouTube channel, that he likes to use Heikin-Ashi candles when looking into Bitcoin because the metric shows much more comprehensive story about price action by including data from the preceding two candles.

“The reason we look at Heikin-Ashi candles is because if you don’t and you just look at normal candles where the color of the candle is only dependent on the open and close, it doesn’t tell the same type of story or narrative that really wants to be told. In an uptrend, you will still see red candles, and in a downtrend, you’ll still see green candles.

Heikin-Ashi candles not only account for the open and close, they also account for the high and the low and they are dependent on the candles that come before them. Because of this, it is a more useful way of measuring the momentum of the market and it helps you sort of cut out the noise of all short-term moves back up to the upside.”

The analyst looks at BTC’s chart action over the past several bear cycles and warns that Bitcoin investors might witness disappointing results until the coming fall this year.

“That’s why I’m saying that people need to be prepared for this bear market to continue dragging on, if history is any indication we recognize that when we’re in a bear market we know that things like the 200-day moving average when they’re starting to hold as resistance, this is a fairly good indicator of in fact a bear market.”

Cowen ends his update by pointing out the pattern of back-to-back red candles on 3-month candles over the life span of Bitcoin since 2011.

“Let’s go look at Heikin-Ashi candles on the quarterly. Now this one is very interesting because if you look at quarterly Heikin-Ashis, you can see that there’s one period where we had three in a row, one period where we had four, another period where we had four, and then another one where we had two.

So the average, out of all 13, you divide that by four, a little over three is sort of the average on that. So you could argue that the expected quarters where these are going to stay red would be a little over three, meaning that even next quarter could still come in red.

The funny thing is next quarter could be a green quarter but the Heikin-Ashi could still be red just because it’s carried over from the momentum of the prior quarter as well, so you have to remember that.”

At time of writing, BTC trades at $28,913, down 5.5% on the daily chart.

Heikin-Ashi is a Japanese trading indicator that means “average pace.” Heikin-Ashi charts resemble candlestick charts, but have a smoother appearance as they track a range of price movements, rather than tracking every price movement as with candlesticks. Heikin-Ashi was created in the 1700s by Munehisa Homma, who also created the candlestick chart. These charts are used by traders and investors to help determine and predict price movements.