Earlier this week, altcoins registered a healthy bounceback as the Bitcoin price tanked to $58,000 with the BTC market dominance dropping by 2%. Popular crypto analyst Benjamin Cowen said that it’s too early to assume an altcoin rally moving ahead, citing the lack of enough liquidity to support the momentum.
Analyst Benjamin Cowen stated that just because altcoins dumped harder than Bitcoin during the correction, they would bounce back higher. However, he calls this a false equivalence adding that the Bitcoin price dominance hasn’t topped yet.
Cowen pointed out that historically, the ALT/BTC pairs act as oscillators, and despite the recent rallies, they still remain above their long-term lows.
He further added that over the past week, the ALT/BTC pairs have bounced back from 0.36 to 0.40. Cowen further emphasized that the 0.36 level marks the lowest point in the ALT/BTC pairs in the past few years. Thus, he suggested that the previous prediction of an altcoin season may have been premature.
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Cowen also stated that back in 2019, the ALT/BTC pairs experienced a breakdown just before the Federal Reserve rate cuts, rallying briefly from 0.25 to 0.42. This led many to speculate that BTC dominance has peaked, however, the ALT/BTC pairs subsequently declined to 0.25.
Despite the ongoing predictions of a decline in Bitcoin dominance over the years, Cowen notes that it has consistently held above its bull market support bank showing strong resilience since the beginning of 2023.
He also pointed out that significant bullish movements in the ALT/BTC pairs have historically occurred in the post-halving years. Thus, there’s a greater chance of the altcoin rally to begin in 2025 than in 2024. Furthermore, as CoinGape reported, the Fed rate cuts are unlikely to happen in 2024. Thus, liquidity is likely to remain tight until then.
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Cowen concluded by stating that the ALT/BTC pairs are likely to continue bleeding until the Fed announces rate cuts and resumes quantitative easing (QE). While there’s a temptation to anticipate these actions, historical cycles consistently indicate that BTC dominance will exceed popular expectations, he said.
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