Widely followed crypto analyst Benjamin Cowen warns that Bitcoin (BTC) could see a significant price drop before next year’s halving in April 2024.
In a new interview with Scott Melker, Cowen say Bitcoin has historically collapsed by 50% leading up to a halving.
While the analyst doesn’t specifically predict such a collapse, a 50% drop from Bitcoin’s last peak would put the price near $15,000.
“Look, the last cycle, what we always see, everyone is talking about Bitcoin halving. I’ve seen this over the past few cycles. Everyone is talking about it and what normally happens is that Bitcoin halves [in price] before the halving, and then people say, ‘Oh, that’s what the halving meant.’
During the last cycle, the pandemic decline, we were still down 50% even before that happened. That was still a 50% drop. And this decline started in the summer. To do this, go to the cycle. We had a decline from the summer and it dropped 50% before the real bull market started. So I still look at it and some people say, ‘Well, it’s not going down today.’ How do we know this isn’t the case? How do we know that this isn’t just a lower high and that this is still part of the 50% drop? It could be.”
Cowen says one of the reasons he believes Bitcoin could make a big move downward is the drying up of liquidity in crypto markets and most risky asset markets.
“And that’s my concern for Bitcoin, is that liquidity is leaving the altcoin market. The purchasing power of these altcoins is declining and at some point I think this will impact Bitcoin. Look at the total market capitalization. If there was a lot of new money coming into the space, why is the total market cap the same as in February and the same as in August 2022?
There’s not really a lot of new money coming into the space, it’s really just money shuffling back and forth from the altcoin market to Bitcoin, and one of the main drivers of that is Ethereum. Look what’s going on with the ETH/Bitcoin pair. It is currently collapsing. I said before: this just looks like a distribution phase.”
Bitcoin is trading at $28,527 at the time of writing, while the ETH/BTC pair is trading at 0.05532 BTC ($1,578).
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