A extensively adopted crypto analyst is issuing a warning to traders, saying {that a} deep correction within the altcoin markets could also be on the horizon.
In a brand new video replace, outstanding crypto strategist Benjamin Cowen tells his 783,000 YouTube subscribers that historical past is signaling a large downswing for altcoins.
In accordance with Cowen, the Bitcoin dominance (BTC.D) chart at present appears to be like robust and historic knowledge suggests that it’ll proceed to be bullish as Bitcoin (BTC) inches nearer to its halving occasion subsequent 12 months.
The Bitcoin dominance index tracks how a lot of the entire crypto market capitalization belongs to Bitcoin. A bullish BTC.D chart means that Bitcoin is taking a bigger share of the crypto markets on the expense of altcoins.
Says Cowen,
“I feel basically the dominance may be very bullish and if the dominance is bullish, it’s not a very good factor for altcoins on their Bitcoin pairs.
And if the dominance is bullish within the pre-halving 12 months, then it tends to not be a very good factor for altcoins on their USD pairs as effectively. That’s what historical past tells us. It doesn’t imply that it has to occur however that’s simply what historical past tells us.”
Cowen goes on to say that the crypto king’s dominance stage breaking above 49% could be a “risk-off” sign and that BTC’s dominance stage may rise even when Bitcoin’s value dips.
“We may maintain the road, and we may get one other push increased, but when it occurs then what I might say is don’t look so intently on the value, simply look to see when the dominance breaks 49% in a sustained means, and that may to me be the risk-off sign.
And you may nonetheless see the dominance break 49% in a Bitcoin downtrend. I imply don’t overlook [the May-June dominance rally in 2022]. What was occurring available in the market then? Bitcoin was taking place [in price] and the dominance was going up.”
Cowen goes on to say he that believes capital will probably rotate from altcoins into Bitcoin though the method may take time.
“You may see the altcoin bleeding again to Bitcoin. It’s clear as day… It’s taking place. It’s only a very sluggish course of…
The altcoin market is probably going simply going to bleed again to Bitcoin for fairly a protracted time frame, and that’s why it’s worthwhile to place in your (Bitcoin) maxi hat throughout that point till you see the altcoin market get wrecked on their Bitcoin pairs, the dominance effectively above the vary excessive and solely then does it make sense, for my part, to noticeably contemplate the altcoin market.”
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Featured Picture: Shutterstock/House creator/Natalia Siiatovskaia
