Three Things to Know Analyst Benjamin Cowen said bitcoin may be heading into a final capitulation phase before its four-year cycle bottom. The daily chart shows deeply oversold momentum, yet
Benjamin Cowen said bitcoin could slide much further if its 200-week moving average fails. He expects a cycle low around the turn of the year, echoing past post-midterm selloffs.
The warning lands as bitcoin posts its worst week in months and on-chain gauges still sit above past bottom readings. Traders now want to know whether the long-term average will hold through year-end.
Cowen, host of Into The Cryptoverse, expects the cycle low in December or early January. Cowen pointed to sharp selloffs that followed US midterm elections in 2014, 2018 and 2022, each ahead of a cycle bottom.
Bitcoin slipped below $70,000 this week. Ether fell about 4%, while XRP held near $1.
Cowen said the failure to hold $83,000 on weekly closes marked the earlier breakout as a likely bull trap. He warned that the 200-week moving average may not hold either. In 2015 and 2020, bitcoin dropped about 30% below that line. A similar move now would point toward $40,000.
On-chain gauges have not reached bottom readings yet. Bitcoin still trades above its realized price, the average cost basis of all coins. The MVRV Z-score sits at 0.565, while past lows came below zero. That means valuations remain above levels seen at earlier bottoms. Cowen's on-chain risk metric reads 0.21, against sub-0.10 levels at earlier bottoms. Social risk, at 0.07, already sits near late-2018 lows.
Cowen flagged the Federal Reserve's year-end meeting as the catalyst. A hawkish turn could deepen selling but set up a stronger 2027. Holding the 200-week average through year-end would strengthen the bull case, he said.
Bitcoin (BTC) daily price with the nearest support (green) and resistance (red). Source: TradingView
Bitcoin traded near $65,000 on Friday, well below the two moving averages most traders watch. A moving average smooths out daily swings to show the underlying trend. When price sits under one, that average tends to act as a ceiling on rallies.
The 50-day average stands near $77,000. The 200-day sits just below it. Both lines now hang more than $10,000 above the market. That gap shows how far buyers would need to push just to repair the recent damage.
Those lines have also drawn close together, with the 50-day only slightly above the 200-day. A shorter average sliding toward a longer one signals that medium-term momentum is fading. If the 50-day crosses below, many traders would read it as confirmation of a downtrend.
Bitcoin lost about 21% over the past month. Roughly 14% of that came in the last seven days alone. That fits the sharp late-cycle drop Cowen described.
Prices did rise about 2% over the past 24 hours. That move looks small next to the weekly loss. The daily chart still shows lower highs and lower lows. Until bitcoin climbs back toward those averages, the trend points down.
The daily RSI sits near 24. RSI, a 0 to 100 gauge of momentum, flags a market as oversold below 30.
Oversold readings often come before relief bounces. A stretched RSI does not mark a bottom on its own, though. In strong downtrends, the gauge can stay pinned low for weeks while prices keep sliding.
Other signals still favor the bears. MACD, which tracks shifts in momentum, remains below its signal line. That means downside pressure has not eased. Trend strength gauges also show sellers leading a firm trend.
Any rebound from here would count as a countertrend move. Traders would want to see momentum turn higher before treating a bounce as the start of a recovery.
Nearest support sits around $62,000, just below the current price. A daily close under that level would expose the next floor near $59,000. Losing both would leave few clear chart markers above the 200-week average Cowen is watching.
Buyers have defended the low $60,000s so far, which helps explain the small bounce. A second test of that zone would show whether demand is still there. A clean break would hand sellers the next leg.
On the upside, first resistance sits near $75,000. Reclaiming it would put bitcoin right under the cluster formed by its two daily averages. That area could stall any rally.
The next resistance stands near $80,000, just shy of the weekly level bulls failed to hold. Only a move through that zone would challenge Cowen's bull trap call.
Short-term traders face two clear paths over the coming sessions.
Until bitcoin climbs back above its daily averages, the chart favors Cowen's capitulation path over a lasting bottom.
The Fed meeting is the main risk. A hawkish message could speed up the decline. Deeply oversold markets can also produce sharp short squeezes, so swings in both directions are likely.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
