Famous cryptocurrency analyst Benjamin Cowen believes that macroeconomic indicators suggest altcoins will gain strength against Bitcoin (BTC) in the coming months. According to the analyst, Bitcoin‘s dominance over the market may have peaked.
Fed’s U3 Indicator and Rally Signals
Cowen highlighted the Sahm Rule Recession Indicator, which tracks signals that could indicate the start of a recession, to his YouTube channel subscribers. According to the Federal Reserve Bank of St. Louis, this indicator is triggered when the three-month moving average of the National Unemployment Rate (U3) increases by 0.50 percentage points or more compared to its lowest level in the previous 12 months. The indicator reached 0.53 percentage points in July.
Cowen stated the following in his announcement:
This indicator is giving a signal. This means that a looser monetary policy is coming, regardless of whether you believe a recession is imminent. What does this mean? If a loose monetary policy is coming, Bitcoin dominance will peak soon. Theoretically, this peak may have already been seen. My view is that we will see this situation at the earliest in September and at the latest in December. We are slowly starting to see these reasons.
There are signs of weakening in the labor market. Look at job postings per unemployed worker, it has returned to pre-pandemic levels. They haven’t lowered the interest rates yet. This situation will likely worsen until the rates are lowered.
Altcoins Will Come to the Fore
Cowen stated that this weakening in the labor market and the potential easing in monetary policy could lead to altcoins gaining strength against Bitcoin. This means that investors could enter a period where Bitcoin’s market dominance decreases and altcoins come to the fore.
Especially macroeconomic indicators and developments in the labor market seem to play a decisive role in this process. The analyst added that this situation could create new opportunities in the cryptocurrency market.
