Top analyst Benjamin Cowen is issuing a warning, saying the story signals massive altcoin reckoning
A widely respected crypto analyst is warning investors, saying a deep correction in altcoin markets is imminent.
In a new video update, prominent crypto strategist Benjamin Cowen tells his 783,000 YouTube subscribers that the story signals a massive downturn for altcoins.
According to Cowen, the Bitcoin (BTC.D) dominance chart is looking strong right now and historical data suggests it will remain bullish as Bitcoin (BTC) gets inches closer to its halving event next year.
The Bitcoin Dominance Index measures how much of the total crypto market cap is Bitcoin. A bullish BTC.D chart suggests Bitcoin is capturing a larger share of crypto markets at the expense of altcoins.
Says Cowen
“I think fundamentally the dominance is very bullish and when the dominance is bullish it is not good for altcoins on their bitcoin pairs.”
And if the dominance is bullish in the year leading up to the halving, then that tends not to bode well for altcoins on their USD pairs either. That’s what history tells us. That doesn’t mean it has to happen, but history tells us that.”
Cowen goes on to say that exceeding the crypto king’s dominance level above 49% would be a “risk aversion” signal and that BTC’s dominance level could rise even if Bitcoin’s price falls.
“We could hold the line and push it up again, but if that happens then I would say don’t look too closely at the price, just look at when the dominance breaks sustained 49%.” and that would be for me the risk aversion signal.
And you could still see dominance collapse 49% in a bitcoin downtrend. I mean don’t forget [the May-June dominance rally in 2022]. What happened at the market back then? Bitcoin declined [in price] and dominance increased.”
Cowen goes on to say that he believes capital is likely to be reallocated from altcoins to bitcoin, although this process could take some time.
“You can see the altcoin gravitating back to bitcoin. It’s clear as day… It’s happening. It’s just a very slow process…
The altcoin market is likely to just transition back to bitcoin for an extended period of time, so it’s worth putting on your (bitcoin) maxi hat during this time until you see the altcoin market dying on its bitcoin pairs . Dominance is well above the range high and only then does it make sense to seriously consider the altcoin market in my opinion.”
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