Widely followed crypto analyst Benjamin Cowen is warning that the odds are majorly in favor of Bitcoin (BTC) and crypto markets going for another leg down before new highs.
In a new strategy session, Cowen argues that the recent bounce in Bitcoin was most likely due to capital shifting from altcoins and into the safer bet of BTC, rather than new money entering the markets.
[adinserter block="1"]Because of this likely dynamic, the analyst says that BTC’s recent rally lacks sustainability.
“No matter the direction of Bitcoin/USD, the dominance in Bitcoin is likely going to go higher. At some point this year, I think, we will reach a phase where there is not enough liquidity from the altcoin market to sustain Bitcoin’s valuation in the short term and we’ll get a secondary scare just like we did last cycle, and just like we did the cycle before that.
Ultimately, what I’m trying to say is that, altcoins, in my opinion… for the last year and a half and continuing still until there’s a more clear bottoming process for altcoins in their Bitcoin pairs are just not worth the risk because Bitcoin is sucking in all of that excess liquidity from the rest of the market.”
Cowen says historically, Bitcoin sucks liquidity from the altcoin market before creating a final correction that sets BTC up for the next bull run.
“A lot of what we’re seeing is liquidity moving away from the altcoin market and into Bitcoin.
One of the things that I’ve said before, is that in the pre-halving years, there’s this idea that liquidity flows from the altcoin market back to Bitcoin, and it’s hard to know at exactly what point liquidity from the altcoin market is no longer sufficient to prop up the price of Bitcoin/USD, before we normally get the secondary scare, before the next halving and expansion.”
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