Extensively adopted crypto analyst Benjamin Cowen is warning that Bitcoin (BTC) might see a big value drop earlier than subsequent yr’s halving occasion in April 2024.
In a brand new interview with Scott Melker, Cowen says Bitcoin has traditionally collapsed by 50% within the lead-up to a halving occasion.
Whlie the analyst doesn’t particularly predict such a collapse, a 50% drop from Bitcoin’s final excessive would place it close to $15,000.
“Look, final cycle, what we all the time see, everybody talks in regards to the Bitcoin halving. I’ve seen this for the final a number of cycles. Everybody talks about it and what usually occurs is Bitcoin halves [in price] earlier than the halving after which persons are like, ‘Oh, properly, that’s what the halving meant.’
Final cycle, the drop into the pandemic, we nonetheless dropped 50% even earlier than that occurred. That was nonetheless a 50% drop. And this drop began in the summertime. Go to the cycle earlier than that. We had a drop beginning in the summertime and it dropped 50% earlier than the true bull market started. So I nonetheless take a look at it and a few folks say, ‘Properly, it’s not dropping at present.’ How do we all know it’s not? How do we all know that this isn’t only a decrease excessive and that that is nonetheless a part of the 50% drop? It may very well be.”
Cowen says one of many the reason why he believes Bitcoin might make a serious transfer to the draw back is the drying up of liquidity in crypto and most danger asset markets.
“And that’s my concern for Bitcoin, is that liquidity is leaving the altcoin market. The buying energy of those altcoins are happening and in some unspecified time in the future, I feel that impacts Bitcoin. Have a look at the entire market cap. If there have been a number of new cash coming into the house, why is the entire market cap the identical because it was again in February and the identical because it was again in August 2022?
There’s not likely a number of new cash coming into the house it’s principally simply cash shuffling round from the altcoin market to Bitcoin and one of many important drivers of it’s Ethereum. Have a look at take a look at what’s happening with the ETH/Bitcoin pair. It’s collapsing proper now. I stated earlier than, this simply merely seems like a distribution part.”
Bitcoin is buying and selling for $28,527 at time of writing, whereas the ETH/BTC pair is buying and selling for 0.05532 BTC ($1,578).
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