A prominent analyst is studying historical trends in Bitcoin as well as the US stock market to determine when the leading cryptocurrency could regain some positive momentum.

In one strategy session Newly, Benjamin Cowen says major corrections like the one Bitcoin has seen since hitting an all-time high above $69,000 last November are unlikely to recover overnight.

“Based on history, any time bitcoin closes below a bull market support band, assume it will be a few months before we can actually get back above it…

In my opinion, 3 to 6 months is usually a realistic time to actually attempt a comeback above it… BTC has been below the support band for about 9 weeks and is now at 9 weeks, so the timeframe for a return to the top is conservatively estimated at 3 Being weeks away… Basically, that would be a best-case scenario.”

The Bullish Market Support Band is a market indicator that consists of a 20-week simple moving average (SMA) and a 21-week exponential moving average (EMA). The band currently ranges between $45,000 and $50,000.

Source: Benjamin Cowen

Cowen added that his best-case scenario for Bitcoin could materialize if the U.S. stock market recovers over the long term.

“To do this, the stocks have to be in the green for a few weeks. We often think that we live in a bubble where cryptocurrency goes its own way, but that’s not true.

If Nasdaq and S&P continue to fall, rest assured that Bitcoin is very likely to fall as well. And that’s not necessarily because bitcoin is going astray. Basically nothing has changed, but it shows that instead of taking risks, people continue to shift to less risk…

Not limited to bitcoin, but to all real assets.”

Technical Analysis

While Bitcoin is recovering from a 50 percent plunge since hitting ATH in November 2021, technical and on-chain indicators are not showing strong momentum and signs of a new bull run.

The market structure is similar to the June-July 2021 bottom and there is no catalyst. A possible case for bitcoin is medium-term sideways trading.

Daily time frame

Looking at the historical data of the two previous market corrections on the daily timeframe, the trend reversed after the 14-day RSI (denoted by yellow vertical lines) broke the SMA-200 line.

Furthermore, the start of the downtrend is associated with a break below the long-term moving averages, denoted by the red vertical lines. Therefore, if history repeats itself, potential medium-term crossovers could present traders with a better opportunity to re-enter the market.

Source: TradingView

4 hour time frame

Bitcoin on the 4-hour time frame has been struggling with the same downtrend line since hitting ATH. So far the award has been rejected.

The transition between this downtrend line and the static resistance at $40,000 is a key area to break for the uptrend to continue. A breakout of this zone could indicate that the bulls are returning to the market.

Source: TradingView

On-Chain Analysis

Net unrealized loss (NUL) is calculated by dividing the total value of UTXOs that have suffered a loss by the market capitalization. The rising value means more investors are starting to lose money, suggesting a possible bottom.

Since hitting $33,000 a week ago, the index has fluctuated in a 0.1-0.17 range, similar to the same structure the market saw in the second quarter of 2021, and bottomed in June.Based on this indicator is a possible scenario a medium-term scenario price per side.

NUL Bitcoin | Source: CryptoQuant