Benjamin Cowen, closely followed by cryptocurrency investors and known for his accurate predictions, cautions investors. Altcoin markets direction is where bitcoin is going and high correlation requires it. So what awaits altcoin investors in the short and medium term? Why is Cowen warning?
Bitcoin comment
A popular cryptocurrency analyst says as markets try to recover from a few weeks’ tough slumps Bitcoin (BitcoinIt uses a refined technical analysis metric to determine where . In a new strategy session Benjamin Cowen, told his roughly 750,000 subscribers that he prefers to use Heikin Ashi candlesticks when analyzing Bitcoin. Because this allows for more comprehensive predictions about the price action by incorporating data from the previous two candles.
“The reason we look at Heikin Ashi candles is because if you don’t look and just look at regular candles where the color of the candle depends only on whether it’s open or closed, they don’t have the same story or You don’t really understand what is being said. In an uptrend you still see red candles and in a downtrend you still see green candles Heikin Ashi candles not only consider the open and close, but also the lows and highs and are dependent on the previous candles. So it’s a more useful way to gauge market momentum and helps you cut through the noise of any short-term moves to the upside.”
Cowen cites BTC’s chart behavior in recent bear cycles and says investors may be disappointed.
Will altcoins rise?
Cowen believes the bear markets will continue. In particular, it notes that Bitcoin is holding the 200-day moving average as resistance. The crypto analyst concludes by highlighting the back-to-back pattern of the red candle in 3-month candles over Bitcoin’s lifespan since its inception in 2011.
“Let’s go every three months Heikin-Ashi Let’s look at the candles. That’s very interesting, because if you look at the quarterly Heikin-Ashi, you can see that there was a period where we got three in a row, a period where we got four, a period where we got four , and then another period . So the average of all 13 when you divide that by four is just over three, sort of an average for that matter. So, one could argue that the quarters these are expected to stay red will be just over three, so even the next quarter could still be red. Oddly, the next quarter can be a green quarter, but Heikin-Ashi can still be red since he just moved from the momentum of the previous quarter, so you have to keep that in mind.”
In other words, we may not see any serious recovery for at least the next 6 months. If Cowen is right Bitcoin We won’t see the talked-of bottom in the $20,000-22,000 range for months. altcoins In the process, it will suffer much larger losses, perhaps in excess of 60% from its current levels. It is particularly difficult for individual investors to hedge their positions, so it can be beneficial to stay away from margin trades for a while, at least by sticking with spot positions. It takes a few minutes to lose your money in margin trading, while in spot trading you will see a loss of more than 90% in a matter of months if you are very unlucky. With the spot rate down over 90% from current levels, your unplanned purchases could cause you to lose even more. An altcoin can drop 90% multiple times. During these periods of heightened volatility, it will be in your favor to trade more cautiously.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies involve high volatility and therefore high risk and conduct their transactions in accordance with their own research.
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