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- 1 The Bitcoin price went through a significant downfall that spread doubts in the crypto landscape.
- 2 Benjamin Cowen, the CEO, and founder of ITC Crypto, gives detailed insights into the Bitcoin dip this year before its halving next year.
Prominent cryptocurrency Bitcoin (BTC) saw a fall last week sending skepticism throughout the broader crypto market. The immediate reasons behind the BTC price were said to have something to do with Elon Musk’s space exploration company SpaceX selling off millions worth of Bitcoin. But it turns out that there is more behind the mainstream story.
The timing of when the biggest cryptocurrency saw a downfall coincides with the realization of interest rates to remain higher since the recent CPI data suggests the economy is doing better.
For instance, consumer spending and new home sales in July 2023 were reported to come out stronger. The growth, citing the numbers, was even compared to what was seen in the last decade in the following quarters after the COVID-19 pandemic recovery.
The Bitcoin price was swinging between the $29K to $30K price range for the past weeks.
However, breaking the support levels, the BTC price drops down to $28K following the economic news. And the fall didn’t stop and it attained the recent low of close to $25K. But soon the price recovered a bit and sustained over $26K.
Analyst Have to Add on Bitcoin Price Drop
In a recent tweet, Benjamin Cowen, an expert in the cryptocurrency field and the CEO and founder of ITC Crypto, offers insights into the recent decrease in Bitcoin’s price.
Drawing attention to a recurring trend, Benjamin Cowen, the CEO, and founder of ITC Crypto highlights a historical pattern that often manifests in August and September. This pattern tends to lead to a correction in Bitcoin’s price. Cowen’s analysis reveals that, in each prior cycle, Bitcoin has consistently dipped below its bull market support band (BMSB) during the months of August and September in the year preceding its halving event.
Interestingly, this decline in Bitcoin’s price aligns with a decrease in the S&P 500 (SPX), which has experienced a roughly 5% drop this month. Cowen emphasizes that this scenario is not uncommon, highlighting that pre-halving years have historically witnessed significant challenges for both bullish and bearish trends, resulting in considerable volatility.
At the start of August, Cowen highlighted this historical trend, noting that over the past three pre-halving years, Bitcoin consistently dipped below its bull market support band during the months of August and September. This observation underscores a consistent pattern that has been observed in the lead-up to previous halving events.
Correction Phase Before Bitcoin Halving
As per Cowen’s analysis, the purpose behind this corrective phase is to eliminate scams and opportunistic activities before the upcoming BTC halving event. This historical narrative unfolded once again as Bitcoin’s value dropped below its bull market support band (BMSB). This pattern seems to be aimed at clearing out unhealthy elements from the market prior to significant events like halvings.
After a notable sell-off observed in the previous week, Bitcoin concluded a period by closing below the bull market support band for the first time since the beginning of January 2023. This occurrence marks a departure from the previous trend and suggests a shift in market dynamics.
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
