Bitcoin (BTC/USD) is currently trading above $112,000, prompting market analysts to predict whether it can uphold crucial support levels that might lead to a potential rally in the fourth quarter. In his recent podcast, well-known analyst Benjamin Cowen expressed optimism about Bitcoin maintaining its bull market support band near $110,000 as September unfolds. Historically, this month has presented challenges for the cryptocurrency market, yet Cowen suggests that early September volatility might just be a precursor to a quicker recovery. He pointed out that initial lows could signify the bottom for the month.
Cowen noted parallels between Bitcoin’s current positioning and its behavior in 2020, where the coin hovered near the 20-week simple moving average (SMA) before experiencing a significant rally in October. If Bitcoin manages to hold these levels, it could unlock the next phase of the post-halving bull market.
Meanwhile, the altcoin market, particularly Ethereum (ETH/USD), is undergoing corrections as it aligns with its 20-21 week moving averages. Cowen forecasts that Ethereum might see a decline of around 20% to its 21-week exponential moving average (EMA) before gearing up for a resurgence toward new highs. Other altcoins such as Avalanche (AVAX/USD) and XRP (XRP/USD) have already entered corrective phases.
Cowen pointed out that typical seasonal trends indicate altcoins tend to peak around late August. He emphasized that for a sustainable rally among altcoins, Ethereum must surpass the $5,000 mark, a feat that seems improbable given the current market challenges. This perspective reinforces a concentrated focus on Bitcoin as altcoins navigate their corrections.
Looking ahead, Bitcoin’s dominance remains a critical measure for observing the continuation of the market cycle. A rise in Bitcoin dominance could indicate leadership in the market, while a decline may signal that the cycle is nearing its completion. The 50-week SMA at approximately $97,000 acts as a fundamental support level, and weekly closures below this threshold could lead to the end of the post-halving cycle.
Cowen issued a caution about potential volatility and weakness persisting throughout September, mirroring historical seasonal patterns often marked by early-month fluctuations and subsequent stabilization. However, he remains optimistic that any weakness seen in September will likely resolve by early October, thereby setting the groundwork for potential rallies in the final quarter of the year.
For now, Cowen advises investors to concentrate their attention on Bitcoin, while suggesting that altcoins are expected to recover following their corrections, priming the market for the final parabolic phase of the cycle.
