The king of cryptocurrencies continues to hover around $28,500. Despite the fake ETF news, the losses have been limited. However, according to a prediction shared by renowned analyst Cowen, these days may not be good yet. The expert, who draws attention to the historical price trend mentioned by many experts, made a frightening prediction.
Crypto Predictions
In a recent interview with Scott Melker, Cowen discussed the historical roadmap of the king of cryptocurrencies. Different analysts have been saying the same thing, that the price could experience double-digit losses within 6 months before the halving.
According to the crypto commentator, the price of Bitcoin could drop as much as 50% below the 2023 peak. This was previously calculated as 60% of the ATH in previous cycles. However, Cowen seems to have made this new prediction because the price is already extremely low. He said the following during the program:
“Look, the thing we’ve always seen in the last cycle is everyone saying Bitcoin is running towards the block reward halving. I’ve seen this for the last few cycles. Everyone talks about it and what normally happens is that the price of Bitcoin gets cut in half before the block reward halving happens and then people say, ‘Ah, that’s what the halving meant’.
In the last cycle, we had already dropped 50% even before the pandemic hit. And this drop started in the summer. Go back to the previous cycle. We had a drop that started in the summer and dropped 50% before the real bull market started. So I’m still looking and some people say, ‘It’s not dropping today’. How do we know it’s not dropping? How do we know it’s not just a lower top and still part of that 50% drop? It could happen again.”
If Cowen is right, this could result in losses well above 50% for altcoins. Moreover, the recent sell-offs for altcoins heading towards ATL levels would mean losses of up to 99% from the peak.
Bitcoin and Crypto Commentary
The main motivation for Cowen and other analysts expecting a decline is the drying up of liquidity. The Fed’s balance sheet is shrinking and interest rates are rising. As investors shift to less risky alternatives, the cheap money flowing into crypto is evaporating day by day.
“My concern with Bitcoin is also that liquidity is leaving the altcoin market. The purchasing power of these altcoins is decreasing, and at some point, I think it will affect Bitcoin. Look at the total market cap. If a lot of new money is entering this space, why is the total market cap the same as it was in February or August 2022?”
