Cryptocurrency analyst Benjamin Cowen is warning that altcoins may face a significant correction compared to Bitcoin (BTC). Cowen, who is followed by over 751,100 Twitter users, is closely monitoring the total market capitalization of altcoins (TOTAL3) against Bitcoin.
According to Cowen’s analysis, the chart suggests that altcoins could experience massive capital outflows as investors flock to Bitcoin. He points out that in July 2019, altcoins were at the same valuation against BTC as they are currently. While timeframes don’t have to align perfectly, Cowen argues that this chart indicates altcoins could collectively drop another 40% against BTC, which he refers to as the “altcoin reckoning.”
Cowen acknowledges that some altcoins may see temporary rallies in their Bitcoin pairs, but he believes this doesn’t discount the larger trend he is predicting. He notes that historical market movements show stochastic patterns, with occasional bounces not undermining the macro thesis of altcoin-to-BTC pairs.
In addition, Cowen highlights the Bitcoin dominance (BTC.D) chart, which appears to be consolidating in preparation for another upward move. The BTC.D index measures how much of the total crypto market capitalization belongs to Bitcoin. A bullish BTC.D chart indicates that Bitcoin is gaining a larger share of the market at the expense of altcoins.
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At the time of writing, Bitcoin is trading at $30,568, while BTC.D stands at 51.53%.
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In conclusion, Benjamin Cowen’s analysis suggests that altcoins may witness a severe correction against Bitcoin. The chart indicates a potential 40% drop in altcoin valuation against BTC, leading to what Cowen refers to as the “altcoin reckoning.” However, he acknowledges that there may be occasional bounces in altcoin-to-BTC pairs, but this doesn’t undermine the overall trend. The Bitcoin dominance chart also suggests that Bitcoin is increasing its market share at the expense of altcoins. To navigate the cryptocurrency market successfully, it is crucial to stay updated through various sources and exercise caution in investment decisions.
