Bitcoin Breaks Out Against Macro Headwinds; Analyst Cowen Admits Bearish Error

According to Woofun AI, cryptocurrency analyst Benjamin Cowen noted on Thursday that the current market presents a paradoxical scenario: all of his macro-driven bearish signals have been validated, yet Bitcoin continues to strengthen against expectations, breaking the traditional correlation with other asset classes.

Deteriorating Macro Conditions Weigh on Traditional Markets

Rising oil prices have pushed the 10-year U.S. Treasury yield to 5.1%, while the Federal Reserve has been slow to respond with rate hikes to curb inflationary pressures. The 2-year Treasury yield, a key indicator of neutral interest rates, surged 20 basis points in a single day to 4.9%. In contrast, the federal funds rate remains at 4%, which Cowen believes is a full percentage point below the level needed to control inflation.

The combination of rising yields and a strengthening U.S. dollar has caused the S&P 500 to stall after peaking in mid-August. Gold and silver have also underperformed, falling precisely into the weak window Cowen had predicted between mid-September and mid-October.

According to data compiled by Woofun AI, both traditional safe-haven and risk assets have suffered as these macro indicators point broadly toward risk aversion.

Bitcoin's Technical Reversal

Despite the macro headwinds, Bitcoin's technical structure has undergone a fundamental shift. Cowen compared the current situation to historical precedents, noting that Bitcoin has only closed above its 50-week moving average on a weekly basis twice before. The first instance, in 2015, ultimately proved to be a false breakout—though Bitcoin did enter a bull run afterward, it initially set new lows before the rally took hold.

Cowen acknowledged that he had previously assigned only a 35% probability to Bitcoin having bottomed, a judgment that has temporarily damaged his short-term credibility. However, with Bitcoin now breaking above its May highs, he has revised his view, stating that the market trend has clearly turned bullish.

He emphasized that the weekly close is the key signal for confirming a bottom. If the price falls back below $83,000, it could trigger the Q4 pullback he originally anticipated—though not necessarily a new low. He cited the 2012 silver market as a cautionary example: even after a failed weekly close, silver ultimately rallied, suggesting that short-term volatility should not obscure the long-term trend.

Divergence Between Macro and Bitcoin

Faced with the divergence between macro data and Bitcoin's price action, Cowen concluded that while four other indicators all suggest caution, Bitcoin points in the opposite direction. He stated bluntly that "markets don't have to be logical," and urged traders to prioritize price action over macro theory as long as Bitcoin's structural trend remains intact.