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Experienced cryptocurrency analyst Benjamin Cowen has warned that the downward trend of altcoins against Bitcoin (BTC) is not yet over. The analyst added that the declines in altcoin BTC pairs before the block reward halving are a normal occurrence.
The Danger of Block Reward Halving in Altcoins
Crypto analyst Cowen stated that the declines in altcoin Bitcoin pairs before the upcoming block reward halving are a common event, saying, “What happens when Bitcoin starts to rise before the block reward halving? Altcoins break their support levels against Bitcoin, leaving no place for altcoins to hide when Bitcoin’s price drops. Altcoins continue to suffer damage on Bitcoin pairs and will further decline.”
As known, the block reward halving, which reduces the rewards received by Bitcoin miners per block by 50% in BTC, takes place every four years. Bitcoin’s block reward halving occurs approximately every four years, and the next block reward halving is expected to take place in April 2024.
“Investors Should Be Aware of the Brutal Trend”
Cowen highlighted the extent of altcoins’ loss of value against the leading cryptocurrency by citing Cardano’s performance against Bitcoin (ADA/BTC) last year, saying, “Look at the ADA/BTC trend. It went up, then down, reaching a new low. Every upward movement has resulted in reaching a new low. There is about a 40% drop, and this continues and will continue. You should be aware of this brutal trend.”
The analyst also explained why he believes altcoins will continue to lose value against Bitcoin. Cowen stated that participants in the cryptocurrency market will likely continue to shift their capital from altcoins to BTC, saying:
The reason we see rises in Bitcoin before the block reward halving is not because a lot of new liquidity comes into the market. The reason is that many people sell their altcoins and move into BTC.
In the first half of the year, there will not be enough liquidity in the altcoin market to continue driving Bitcoin/USD to new yearly highs before the block reward halving year, but by that time, the altcoin market will dry up.
