Extensively adopted crypto analyst Benjamin Cowen is warning that the chances are majorly in favor of Bitcoin (BTC) and crypto markets going for an additional leg down earlier than new highs.
In a brand new technique session, Cowen argues that the latest bounce in Bitcoin was most probably because of capital shifting from altcoins and into the safer guess of BTC, somewhat than new cash getting into the markets.
Due to this possible dynamic, the analyst says that BTC’s latest rally lacks sustainability.
“Regardless of the route of Bitcoin/USD, the dominance in Bitcoin is probably going going to go greater. In some unspecified time in the future this yr, I feel, we’ll attain a section the place there’s not sufficient liquidity from the altcoin market to maintain Bitcoin’s valuation within the brief time period and we’ll get a secondary scare similar to we did final cycle, and similar to we did the cycle earlier than that.
Finally, what I’m making an attempt to say is that, altcoins, in my view… for the final yr and a half and persevering with nonetheless till there’s a extra clear bottoming course of for altcoins of their Bitcoin pairs are simply not well worth the danger as a result of Bitcoin is sucking in all of that extra liquidity from the remainder of the market.”
Cowen says traditionally, Bitcoin sucks liquidity from the altcoin market earlier than making a ultimate correction that units BTC up for the subsequent bull run.
“Plenty of what we’re seeing is liquidity transferring away from the altcoin market and into Bitcoin.
One of many issues that I’ve stated earlier than, is that within the pre-halving years, there’s this concept that liquidity flows from the altcoin market again to Bitcoin, and it’s exhausting to know at precisely what level liquidity from the altcoin market is not ample to prop up the worth of Bitcoin/USD, earlier than we usually get the secondary scare, earlier than the subsequent halving and growth.”
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