Noted cryptocurrency analyst Benjamin Cowen has issued a cautionary message to investors warning them of a potentially significant correction in the altcoin markets. In a recent video update, Cowen points to historical patterns pointing to an impending downturn for altcoins.
BTC Dominance Chart Raise Warning For Altcoins:
Cowen’s analysis: Cowen’s analysis revolves around the Bitcoin dominance (BTC.D) chart, which currently appears strong and indicates that Bitcoin (BTC) is poised to exert more leverage in the crypto markets as it approaches next year comes to half.
In addition, Cowen explains that there is an important threshold to watch out for at 49%. If the Bitcoin dominance level exceeds this point, consider it a “risk-off” signal. Historical examples, such as the May-June 2022 dominance rally, show that Bitcoin’s dominance can rise even if the price falls temporarily.
Cowen predicts that capital will likely rotate from altcoins back to Bitcoin, though he acknowledges the process could take some time. He observes the gradual bleeding back of altcoins into Bitcoin and advises investors to adopt a “Bitcoin maxi” perspective until the altcoin market takes significant losses on their Bitcoin pairs and dominance rises well above its reach.
All in all, with Cowen’s warning in mind, altcoin investors are in for a challenging period as Bitcoin’s dominance continues to strengthen. Investors can choose to adopt a “Bitcoin maxi” perspective or continue to explore opportunities within altcoins.
