- Benjamin Cowen expects Bitcoin price to drop 21 percent in August as it has done in pre-halving years in the past.
- Increased institutional demand for Bitcoin and its products like the ETF is expected to push the asset above $120k post-halving event next year.
Bitcoin (BTC) continued to flex its muscles against the altcoin market and traditional financial instruments in the past two days despite recording a bearish outlook in July. According to the latest crypto price oracles, Bitcoin dominance had gained about 1 percent in the past five days to the top 50.12 percent on Wednesday. The sudden Bitcoin price gain coincided with a distressed DeFi lending market after Curve Finance and AAVE protocols were entangled in a liquidity crisis.
Notably, Curve Finance founder Michael Egorov took a loan of $60 million worth of USDT on AAVE protocol and issued 300 million CRV tokens as collateral, and now risks liquidation if the CRV price drops below 37 cents. However, the horrible news is that the CRV token has less than $4 million in liquidity across all DeFi protocols even after Tron Founder Justin Sun intervened.
The poor organization state of DeFi protocols is giving crypto investors the notion that Bitcoin maximalists could be largely right after all. Nonetheless, the altcoin market offers more return on investment opportunities due to its low valuation and higher speculative aspect.
Closer Look at Bitcoin Price Analysis
According to a respected on-chain crypto analyst Benjamin Cowen, Bitcoin price could drop as much as 21 percent by the end of this month. Cowen argued that the average return on Bitcoin in August during its pre-halving years has been around negative 21 percent. The argument was further cemented after Bitcoin price closed last month with a drop of about 4 percent in a similar manner as prior halving years.
As I previously mentioned, the ROI of #Bitcoin in July of the pre-halving years was -4.74%.
The return of #BTC in July 2023 ended up being -4.09%.
FWIW, the average return of #BTC in August of its pre-halving years is -21.3%. https://t.co/L8mVlWFyiZ pic.twitter.com/jN58t1CU0S
— Benjamin Cowen (@intocryptoverse) August 1, 2023
The notion that Bitcoin is headed to trade beyond $32k in the coming weeks has seen its Open Interest significantly increase to about $15 billion. However, Cowen argues that Bitcoin has been doomed in all of August during the pre-halving years. Nonetheless, the analyst remains bullish on Bitcoin price in the long term with a prediction of a new ATH post next year’s halving.
A similar market outlook was issued by Standard Chartered bank analysts who highlighted that Bitcoin could hit $50k by the end of this year and trade above $120k by the end of next year.
Moreover, whale traders led by MicroStrategy have continued to add more coins in the past year despite market uncertainty.
Having closed July trading below $30k, crypto experts believe Bitcoin weaknesses could continue in the coming weeks until the price retests a rising macro trendline. The trade setup could, however, be invalidated if the BTC price continues in a bearish outlook toward $25k. Moreover, Bitcoin price action is still under the influence of a death cross between the 50 and 200 moving averages.
