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, 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 the moment seems robust and historic knowledge 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 believe basically 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 nicely. 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 value dips.
“We might maintain the road, and we might get one other push larger, but when it occurs then what I might say is don’t look so carefully on the value, simply look to see when the dominance breaks 49% in a sustained method, and that will to me be the risk-off sign.
And you might nonetheless see the dominance break 49% in a Bitcoin downtrend. I imply don’t overlook [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 despite the fact that the method might take time.
“You possibly can 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 nicely above the vary excessive and solely then does it make sense, for my part, to noticeably contemplate the altcoin market.”
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