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▲ Bitcoin (BTC)
An analysis suggests that Bitcoin's (BTC) rebound is likely a temporary illusion within a bear market, rather than a new bull run. Contrary to investors' expectations, technical indicators still point to a downward curve.
Cryptocurrency analyst Benjamin Cowen, known as the founder of IntoTheCryptoverse, emphasized in a video uploaded to his YouTube channel on April 26 (local time) that market noise should be eliminated using Heikin-Ashi candles. Heikin-Ashi is an indicator that averages data from previous candles to clearly show trends. What appears as a sharp rise on a regular chart is shown as a mere rebound within a bear market on the Heikin-Ashi chart.
Cowen cited examples of bear markets in midterm election years. In April 2018, Bitcoin surged approximately 34% but ultimately formed a lower low. This April's 13.5% rise also shows a similar pattern to past failures. The key point is that Heikin-Ashi candles still remain red. There is not enough data yet to be confident about a trend reversal.
The Federal Open Market Committee (FOMC) meeting scheduled for this week was identified as a variable that could form a short-term peak. In 2018, there was a precedent where the price peaked immediately after the meeting and declined throughout May. Considering seasonal characteristics, there is a 70% probability of retesting the low in June. The possibility of an interest rate hike by the Bank of Japan is also a factor increasing downward pressure on the market.
The marginalization of altcoins is evidence of the market's weak fundamentals. A structure where only Bitcoin's dominance increases is a typical characteristic of a bear market. Investors' sentiment is extremely sensitive. The data coldly warns of a continued downward trend. The price movements in May and June are expected to be decisive indicators for the future direction.
Cowen disagreed with calling the current surge "the most hated rally." It is merely a statistical movement that has always existed even in past bear markets. Investors should look at the broader trend rather than fluctuating with short-term price changes. Whether this rebound is the last escape opportunity in a bear market or a healthy correction will be proven by the data.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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