Analyst Warns of Resistance as Bitcoin Awaits Post-ETF Peak

Cryptocurrency analyst Benjamin Cowen has presented an analysis of Bitcoin’s market cycles. He used the miner capitalization to thermodynamic capitalization ratio to analyze BTC’s current status. Cowen suggested that the current market might be approaching major resistance levels while institutional investors like MicroStrategy continue to accumulate Bitcoin.

The analysis focuses on the minor cap to thermocap ratio. This is a metric comparing miners’ total holdings value to their cumulative revenue. Historical data shows a pattern of descending peaks across market cycles, with previous cycles showing ratios of 33.5, 26, 17-18, and 11-12, respectively. Following this trend, Cowen projects the next potential peak could occur around a ratio of 7-8, compared to the current reading of 6.

This descending pattern aligns with other market indicators Cowen has previously analyzed. This includes the stock-to-flow deflection and the pi cycle top. The current ratio’s proximity to projected resistance levels suggests Bitcoin could face overhead pressure if its price continues to rise quickly in the short term.

Cowen notes that historically, Bitcoin hasn’t reached cycle peaks until the fourth quarter of post-halving years. However, he emphasizes that market behavior could differ this time. This is particularly considering the impact of spot ETF approvals. The analysis suggests a potential correction might occur approximately 54 weeks after the spot ETF launch, placing it in late January 2025.

The timing of any potential peak could be influenced by Bitcoin’s price action in the coming weeks. If Bitcoin maintains a slower upward trajectory, the ratio could normalize through time. This is similar to what occurred between March and September, when the ratio declined despite similar price levels. However, quick price acceleration could bring the market to these resistance levels more quickly.

Cowen’s analysis provides a framework for understanding potential market cycle peaks while acknowledging that historical patterns don’t guarantee future outcomes. Against this technical analysis backdrop, institutional investment continues to show strength, particularly considering MicroStrategy’s position.

The company, under Michael Saylor’s leadership, now holds 402,100 BTC, according to SaylorTracker data. The current unrealized profits exceed $16 billion. When the price of BTC was above $100,000, the unrealized profit had touched as high as $18 billion.