Crypto Analyst Cowen Shares Three Metrics That Signal Bitcoin Rally
According to a leading crypto analyst Benjamin Cowen there are three metrics that signal that Bitcoin (BTC) could see a price bounce in this month.
Cowen shared in a recent video update on his YouTube channel that the first metric signaling a Bitcoin rally is a correcting US dollar currency index.
“We know that the US dollar currency index, when it’s moving higher in a parabolic rally, we know Bitcoin goes down. We’ve seen this many times in the past. And furthermore, if we just simply pull it up, you can see that over the last several months, the dollar has been in a parabolic rally.
However, recently, you can see it’s pulled back a bit. Now that does not – unfortunately – mean that the dollar rally is over. It could just be taking a break for a while. But certainly looking at the dollar have this pullback leads us to believe that risk-on assets could start to do well for a few weeks.”
Source: Benjamin Cowen
Cowen then notes that the S&P500 and the Nasdaq have had “pretty strong” bounces off their local bottoms. Crypto could well be following these moves, he says:
“The reason, I think, is because we are in a macro risk-off time, and so I would argue cryptocurrencies are inherently riskier than equities, so equities are the first to move when it looks like we might be getting at least a few weeks of some relief, and then as long as that sustains, then crypto will kind of be next in line to go up as well.”
This third signal is that the 90-day exponential moving average (EMA) of the Bitcoin Fear and Greed Index is “lower than it’s ever been.”
Cowen points out that the Index’s 90-day EMA is at 23.56, which he interprets as a bullish signal.
“Why is that significant? We’ve never seen that before. The 90-day EMA of the Fear and Greed is lower than it’s ever been.”
Source: Benjamin Cowen
At the time of writing, BTC trades at $31,780, up 0.41% on the daily chart.
