A widely followed crypto analyst says the Federal Reserve will likely keep interest rates high for longer at the expense of risky assets like altcoins until something breaks.
In a new strategy session, crypto trader Benjamin Cowen tells Its 788,000 YouTube subscribers indicate that the Federal Reserve is unwilling to cut rates until the S&P 500 witnesses a serious corrective action.
“Liquidity flows from high risk to low risk. [It] doesn’t mean lower risk cases can’t go down. It’s just that when they go down, that normally means the end, because when they go down, the Fed notices.
When the S&P falls, the Fed starts to notice. Do you think the Fed cared about the S&P when it was at 4,600? No, it’s too high.
Do they care at 4,100? Probably not. Will they care if it’s 3,500 or 3,400? Yeah, they’re going to care and that’s when they’re going to start cutting, I think. So keep an eye on the S&P if you’re curious about when altcoins will turn around versus Bitcoin.”
As long as the stock market remains high, Cowen believes the Bitcoin dominance chart (BTC.D), which tracks the percentage of the total market capitalization belonging to Bitcoin (BTC), will continue to rise, leaving many altcoins behind. the crypto king.
Cowen also says that BTC.D has historically tended to reverse its uptrend when the Fed begins the rate cutting cycle. Until then, he expects crypto investors to divert their capital from altcoins to Bitcoin.
“The most important thing to recognize is that [BTC] The dominance peaked last cycle in September, as the Fed had already started cutting rates – we haven’t even seen the Fed start cutting rates yet, and last cycle it took another month or two after the first rate cut, where dominance actually peaked… so Why should we assume dominance has peaked?
The S&P 500 currently stands at 4,117 points at the time of writing, while BTC’s market dominance to sit at 54%.
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