Widely followed crypto analyst Benjamin Cowen is warning that Bitcoin (BTC) could see a significant price drop before next year’s halving event in April 2024.
In a new interview with Scott Melker, Cowen says Bitcoin has historically collapsed by 50% in the lead-up to a halving event.
Whlie the analyst doesn’t specifically predict such a collapse, a 50% drop from Bitcoin’s last high would place it near $15,000.
“Look, last cycle, what we always see, everyone talks about the Bitcoin halving. I’ve seen this for the last several cycles. Everyone talks about it and what normally happens is Bitcoin halves [in price] before the halving and then people are like, ‘Oh, well, that’s what the halving meant.’
Last cycle, the drop into the pandemic, we still dropped 50% even before that occurred. That was still a 50% drop. And this drop started in the summer. Go to the cycle before that. We had a drop starting in the summer and it dropped 50% before the real bull market began. So I still look at it and some people say, ‘Well, it’s not dropping today.’ How do we know it’s not? How do we know that this isn’t just a lower high and that this is still part of the 50% drop? It could be.”
Cowen says one of the reasons why he believes Bitcoin could make a major move to the downside is the drying up of liquidity in crypto and most risk asset markets.
“And that’s my concern for Bitcoin, is that liquidity is leaving the altcoin market. The purchasing power of these altcoins are going down and at some point, I think that affects Bitcoin. Look at the total market cap. If there were a lot of new money coming into the space, why is the total market cap the same as it was back in February and the same as it was back in August 2022?
There’s not really a lot of new money coming into the space it’s basically just money shuffling around from the altcoin market to Bitcoin and one of the main drivers of it is Ethereum. Look at look at what’s going on with the ETH/Bitcoin pair. It’s collapsing right now. I said before, this just simply looks like a distribution phase.”
Bitcoin is trading for $28,527 at time of writing, while the ETH/BTC pair is trading for 0.05532 BTC ($1,578).
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