A widely followed crypto analyst is predicting short-lived rallies for a handful of altcoins, including Ethereum (ETH) competitors Polkadot (DOT), Cardano (ADA), and Avalanche (AVAX).
In a new strategy session, crypto trader Benjamin Cowen tells are 784,000 YouTube subscribers that altcoins in 2023 will likely follow the same pattern as they did in 2018, when they rose significantly before crashing back to new lows.
According to Cowen, the current altcoin rally will be no different from those of the past and will likely end once Bitcoin’s (BTC) level of dominance recovers.
Traders keep a close eye on the Bitcoin Dominance (BTC.D) chart as it tracks how much of the total crypto market cap belongs to Bitcoin. A higher level of BTC dominance indicates that traders prefer the best digital asset over altcoins.
says Cowen,
“My view is that until proven otherwise, the altcoin market is still no different than anything we’ve seen before. No difference. The alt market bounced against Bitcoin in 2018, in 2019 it bounced against Bitcoin, but by the end of 2019 it had fallen all the way back to 25% of Bitcoin’s market cap…
[The 2019 altcoin rally] bounced back to the bull market support band around 0.53 so that’s right where the bull market support band is right now maybe a little lower it’s at 0.52 so 52%…
I suspect that the Bitcoin dominance rally will eventually continue. It may be backtesting that level from 49% to 50%, but I suspect it will eventually continue, and that will be because net liquidity starts to fall again.
According to Cowen, a number of altcoins are currently respecting their 20-week simple moving average (SMA) as resistance, including Polkadot, Cardano, Avalanche and Polygon.
Last week, Cowen predicted that altcoins would be “crushed” as Bitcoin’s level of dominance appeared to rise. At the time of writing, BTC’s dominance level sit at 49.9%.
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Featured image: Shutterstock/lassedesignen/Natalia Siiatovskaia
