Renowned crypto analyst Benjamin Cowen believes that altcoins will continue to struggle against Bitcoin (BTC) in the near future. In a recent video, Cowen highlighted a bearish trend where altcoins face significant losses when measured against Bitcoin, particularly in the lead-up to Bitcoin halving events.
Cowen noted that before Bitcoin halvings, there is often a pattern where Bitcoin pumps, causing altcoins to drop against their Bitcoin support levels. When Bitcoin subsequently retraces, altcoins find themselves in a vulnerable position with limited recovery prospects.
Bitcoin halvings, which occur approximately every four years, reduce the rewards received by BTC miners. The next halving is expected in April 2024.
To emphasize the ongoing decline of altcoins relative to Bitcoin, Cowen used Cardano (ADA) as an example. He pointed out how ADA/BTC has experienced a repetitive cycle of upward movements followed by new lows, with drops of around 40% occurring consistently.
Altcoins Face Uphill Battle Against Dominant Bitcoin, Warns Analyst
Cowen believes that this trend is likely to persist as market participants continue to shift their investments from altcoins to Bitcoin. He explained that the pre-halving year often sees Bitcoin pumps, not due to an influx of new liquidity, but because many investors are converting their altcoin holdings into Bitcoin.
While the first half of the year leading up to the halving may witness new yearly highs for Bitcoin when measured against the US dollar, Cowen predicts that the altcoin market will eventually be drained of liquidity, causing altcoins to suffer further losses against Bitcoin.
This analysis underscores the challenges faced by altcoins in maintaining their value and market share compared to the dominant cryptocurrency, Bitcoin.