A broadly 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, distinguished crypto strategist Benjamin Cowen tells his 783,000 YouTube subscribers that historical past is signaling a large downswing for altcoins.
Based on Cowen, the Bitcoin dominance (BTC.D) chart at present appears robust and historic information suggests that it’ll proceed to be bullish as Bitcoin (BTC) inches nearer to its halving occasion subsequent yr.
The Bitcoin dominance index tracks how a lot of the overall 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 essentially the dominance could be very bullish and if the dominance is bullish, it’s not factor for altcoins on their Bitcoin pairs.
And if the dominance is bullish within the pre-halving yr, then it tends to not be 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 degree breaking above 49% can be a “risk-off” sign and that BTC’s dominance degree might rise even when Bitcoin’s worth dips.
“We might maintain the road, and we might get one other push increased, but when it occurs then what I’d say is don’t look so carefully on the worth, simply look to see when the dominance breaks 49% in a sustained means, and that might to me be the risk-off sign.
And you might nonetheless see the dominance break 49% in a Bitcoin downtrend. I imply don’t neglect [the May-June dominance rally in 2022]. What was happening available in the market then? Bitcoin was happening [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 might 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 an extended time period, 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, in my view, to noticeably think about the altcoin market.”
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