In a recent video, Benjamin Cowen, a prominent crypto analyst with a large following on YouTube, shared his belief that altcoins have not yet reached their bottom in terms of their value against Bitcoin (BTC). Cowen explains that this bearish trend in altcoins is a common occurrence leading up to the Bitcoin halving event.
The Bitcoin halving, which takes place approximately every four years, involves a reduction in the rewards received by BTC miners. The next halving is scheduled for April 2024. Cowen suggests that during pre-halving years, when Bitcoin experiences significant price increases, altcoins suffer in comparison. As a result, altcoins struggle to maintain their support levels against Bitcoin and continue to lose value.
Cowen provides an example using Cardano (ADA) as a reference. He highlights the ADA/BTC trend over the past year, showing that it consistently moves up, only to then drop and establish a new low. This pattern has resulted in approximately 40% drops for Cardano relative to Bitcoin. Cowen emphasizes that this trend is brutal and important for investors to be aware of.
Additionally, Cowen explains why he believes altcoins will likely continue to lose value against Bitcoin. He suggests that market participants tend to shift their capital away from altcoins and towards Bitcoin, ultimately making altcoins less desirable and leading to their decline in value. Cowen argues that the pre-halving year pumps in Bitcoin are not due to new liquidity entering the market, but rather individuals converting their altcoins to Bitcoin. He also states that while the altcoin market may have enough liquidity to lead to new yearly highs for Bitcoin in the first half of the year, eventually the altcoin market will become depleted.
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It is important for investors to consider these trends and factors when making decisions about their cryptocurrency investments. Understanding the potential impact of the Bitcoin halving and the dynamics between altcoins and Bitcoin can help investors navigate the market more effectively. However, it is always recommended to do thorough research and due diligence before making any investment decisions.
In conclusion, Benjamin Cowen believes that altcoins are still in a bearish trend against Bitcoin and will likely continue to lose value. He attributes this trend to the upcoming Bitcoin halving and the shift of capital from altcoins to Bitcoin. It is crucial for investors to stay informed about these trends and make well-informed decisions based on their own research and risk tolerance.
