A widely followed crypto analyst is predicting short-lived rallies for a handful of altcoins, including Ethereum (ETH) competitors Polkadot (DOT), Cardano (ADA) and Avalanche (AVAX).
In a new strategy session, crypto trader Benjamin Cowen tells his 784,000 YouTube subscribers that altcoins in 2023 are likely to follow the same pattern they did in 2018 when they rose significantly before crashing back down to fresh lows.
[adinserter block="1"]According to Cowen, the current altcoin rally will be no different than those of the past and will likely stall once Bitcoin’s (BTC) dominance level reestablishes itself.
Traders keep a close watch on the Bitcoin dominance (BTC.D) chart as it tracks how much of the total crypto market cap belongs to Bitcoin. A higher level of BTC dominance indicates that traders are favoring the top digital asset over altcoins.
Says Cowen,
“My view is that until proven otherwise, the altcoin market is still no different than what we have previously seen. No different. The alt market bounced against Bitcoin in 2018, it bounced against Bitcoin in 2019, but by the end of 2019, it had come all the way back down to 25% of Bitcoin’s market cap…
[The 2019 altcoin rally] bounced back up to the bull market support band at around 0.53, so that’s right around where the bull market support band is right now, maybe slightly lower, it’s at 0.52, so 52%…
My guess is that the Bitcoin dominance rally will eventually continue. It might be backtesting that 49% to 50% level, but my guess is that it will eventually continue, and it’ll be because net liquidity starts to go back down again.”
According to Cowen, a number of altcoins are currently respecting their 20-week simple moving average (SMA) as resistance including Polkadot, Cardano, Avalanche and Polygon.
Last week, Cowen predicted that altcoins would get “crushed” as Bitcoin’s dominance level looked primed to rise. At time of writing, BTC’s dominance level sits at 49.9%.
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