Crypto analyst Benjamin Cowen, closely followed by investors, warned that past trends indicate a high probability of a dramatic correction in altcoins before the start of a true bull market for Bitcoin (BTC). Here’s his warning about BTC and Ethereum (ETH), XRP, Solana (SOL), Chainlink (LINK), and other popular altcoins.
In an interview with Crypto Banter, Benjamin Cowen stated that the current rise of Bitcoin is not due to new capital entering the market. The analyst argued that the price of Bitcoin is rising because investors are shifting their focus from altcoins to BTC, which is outside the risk curve. Benjamin Cowen noted that eventually the liquidity coming from altcoins will dry up, and Bitcoin will no longer rely on buying pressure to sustain its rally.
Experienced crypto analyst Benjamin Cowen expects BTC to retreat at one of the nearest resistance levels before succumbing to selling pressure and dragging down altcoins. He stated:
Bitcoin often experiences significant selling pressure before a block reward halving. Maybe this time it will be under such selling pressure after the block reward halving; I do not know for sure, but I believe the reason is that there is not enough liquidity left in the market. In other words, I think the current rise of Bitcoin is not due to new capital entering the market because if there were new capital entering the market, the total market value should have increased.
Despite the rise in the price of Bitcoin, the total market value remained almost the same. The reason behind the rise of Bitcoin, as can also be understood from the increase in Bitcoin dominance, is people converting altcoins to BTC. The problem here is that at some point, the liquidity in the altcoin market will dry up, and there will be no liquidity left to buy altcoins with Bitcoin. All the previous capital in the altcoin market that was there to buy ‘cheap Bitcoin’ when Bitcoin becomes risky again will be gone.
Furthermore, Benjamin Cowen emphasized that the lack of new capital entering the crypto market will be felt, especially affecting altcoins. He added:
There is no longer a buying offer for Bitcoin, and now it’s time for a decline. During this decline, Bitcoin will crush the altcoin market, and the largest cryptocurrency will actually outperform altcoins over the next three to six months. We are still in a phase where altcoins are losing ground against Bitcoin, and at some point, Bitcoin will surpass the altcoin market.