S&P 500 hits new high...Benjamin Cowen: "Bitcoin (BTC) bottom to be decided by September correction"

▲ S&P 500 (SPX), Bitcoin (BTC), Gold, Bull Market, Bear Market / AI Generated Image

Although the S&P 500 broke its all-time high at 7,750, a warning has emerged that the bull market's clock is pointing to September. An analysis suggests that a stock market correction in the second half of the year could determine the market cycle low for Bitcoin (BTC).

Veteran trader Benjamin Cowen predicted in a video uploaded to his YouTube channel on August 4 (local time) that the S&P 500's bullish trend could continue for several weeks. However, based on historical patterns in US midterm election years, he emphasized the possibility of a correction starting between mid-August and September. Cowen stated, “New highs tend to lead to new highs for a while,” but suggested that the market's direction could shift after mid-August.

Cowen's focus was on the midterm election years of 2014, 2018, and 2022. The S&P 500 correction in 2014 began on September 19, falling by approximately 10%, while in 2018, it dropped by about 20% from September 21. In 2022, it underwent a correction of about 20% after peaking on August 16. He emphasized the commonality that in all three instances, the second downtrend began after mid-August.

The next turning point is the Federal Reserve (Fed) meeting scheduled for September 16. The video presented a 57% probability of an interest rate hike and a 43% probability of a freeze. Cowen suggested that an interest rate hike could heighten concerns about renewed tightening. Even if rates are frozen, he analyzed that if the US 10-year Treasury yield surges from 4.6% to above 5%, it could burden the stock market. He explained that the 30-year Treasury yield has already surpassed its October 2023 level.

Even if a correction begins, he predicted that the downtrend would not end quickly. In 2014, a bottom formed in mid-October after the September peak, and in 2022, the decline continued from mid-August to mid-October. The 2018 correction began in September and lasted until December. Cowen argued that in 2026 as well, a correction could start in August or September and extend beyond October.

A stock market correction could also directly test Bitcoin's $60,000 support level. Cowen explained that in 2014, 2018, and 2022, Bitcoin formed its market cycle low during the second stock market correction in the second half of the year. In 2018, while the stock market fell an additional 7-8% from its first low, Bitcoin plunged an additional approximately 48%. He stated that the rising long-term bond yields and the Dollar Index (DXY) are key variables that will determine future weakness in risk assets.

[Article Key Summary]

-The S&P 500 hit an all-time high of 7,750, but Benjamin Cowen raised the possibility of a correction between mid-August and September.

-In the midterm election years of 2014, 2018, and 2022, the S&P 500 fell by 10-20% during the second correction in the second half of the year.

-Cowen analyzed that a stock market correction and rising long-term bond yields could determine Bitcoin's $60,000 support level and its market cycle low.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*