A widely followed crypto analyst is issuing a warning to investors, saying a deep correction in the altcoin markets may be on the horizon.
In a new video update, prominent crypto strategist Benjamin Cowen tells are 783,000 YouTube subscribers that history signals a massive downturn for altcoins.
According to Cowen, the Bitcoin dominance (BTC.D) chart currently looks strong, and historical data suggests it will remain bullish as Bitcoin (BTC) moves inches closer to its halving next year.
The Bitcoin Dominance Index tracks how much of the total crypto market cap belongs to Bitcoin. A bullish BTC.D chart suggests that Bitcoin is occupying a larger share of the crypto markets at the expense of altcoins.
says Cowen,
“I think fundamentally the dominance is very bullish and if the dominance is bullish it is not a good thing for altcoins on their Bitcoin pairs.
And if dominance is bullish in the pre-halving year, then it’s not a good thing for altcoins on their USD pairs either. That’s what history tells us. It doesn’t mean it has to happen, but that’s exactly what history tells us.”
Cowen goes on to say that the crypto king’s dominance level breaking above 49% would be a “risk-off” signal and that BTC’s dominance level could rise even if Bitcoin’s price falls.
“We could hold the line and we could get another push higher, but if it happens I’d say don’t look so closely at the price, just look to see when the dominance breaks 49% in a sustainable way, and that would be the risk-off signal for me.
And you could still see a 49% break from dominance in a Bitcoin downtrend. I don’t mean forget [the May-June dominance rally in 2022]. What was going on in the market at the time? Bitcoin went down [in price] and the dominance went up.
Cowen goes on to say that he believes capital is likely to rotate from altcoins to Bitcoin, even though the process could take some time.
“You see the altcoin flowing back to Bitcoin. It’s obvious… It’s happening. It’s just a really slow process…
The altcoin market is likely to revert to Bitcoin for quite some time, which is why it’s worth putting your (Bitcoin) maxi hat on during that time until you see the altcoin market break down on their Bitcoin. pairs, the dominance is well above the range high and only then does it make sense to me to seriously consider the altcoin market.”
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