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Crypto analyst Benjamin Cowen says there’s a good chance that Bitcoin (BTC) has already found a bottom, despite displaying what many traders would say is fairly bearish price action.
In a new strategy session, Cowen tells his 678,000 YouTube subscribers that pricing Bitcoin in assets other than the US dollar can sometimes be revealing.
Instead of looking at Bitcoin in terms of US dollars, the analyst looks at BTC priced in the stock market using the S&P 500. According to Cowen, Bitcoin has already hit critical support when paired against the S&P 500.
“But if you look at Bitcoin divided by the stock market, we’re actually testing those levels. We’re actually testing the levels that we tested back in September, already. So, some people are sitting here waiting to say that ‘Okay we have to go back down to this level,’ and you could be right. It’s certainly possible to go back to $40,000. It’s certainly possible to go back to $42,000.
Anything is possible with investing in general. All models are wrong. Some are useful, I have no idea what’s going to happen tomorrow. Bitcoin could go to $40,000 tomorrow, and it could go to $55,000 tomorrow. What’s interesting in this analysis is that we’re actually testing those levels that we were [in September].”
Cowen points out that when the stock market is divided by the M2 money supply, it appears to trade sideways rather than in a straight upward line. Using the same principle, the crypto analyst says that Bitcoin would be viewed as undervalued and due for another uptrend.
“With all this money printing and inflation, and the idea that maybe stocks aren’t necessarily worth more because they’re fundamental more but maybe the US dollar is worth less, could this be a measure of some type of inflation and how we can then maybe relate it to Bitcoin and say… based on this, Bitcoin is testing where we were back in September.”