In a recent report by The Daily Hodl, renowned cryptocurrency analyst Benjamin Cowen has reportedly cautioned investors about a potential severe downturn in the altcoin markets. Cowen, who has a significant following on YouTube, suggests that historical patterns indicate a significant fall for altcoins.
Cowen’s analysis is centered around the Bitcoin dominance (BTC.D) chart. This chart represents Bitcoin’s proportion of the total crypto market capitalization. A bullish BTC.D chart implies that Bitcoin is gaining a larger share of the crypto markets, often at the expense of altcoins. Cowen reportedly believes that the BTC.D chart currently appears strong and is likely to continue its bullish trend as Bitcoin nears its halving event next year.
Cowen suggests that a bullish dominance in the pre-halving year has historically not been favorable for altcoins on their USD pairs. He says that a break above 49% in Bitcoin’s dominance level would signal a “risk-off” scenario. Interestingly, he also notes that Bitcoin’s dominance level could rise even if Bitcoin’s price dips.
Cowen also believes that capital will likely shift from altcoins into Bitcoin, although this process could take time. He suggests that the altcoin market might bleed back to Bitcoin for a considerable period, and it’s only when the altcoin market gets significantly impacted on their Bitcoin pairs, and the dominance well above the range high, that it might make sense to consider the altcoin market seriously.
According to data from TradingView, the Bitcoin price is trading at around $26,840, down 1.09% in the past 24-hour period.