The widely followed crypto analyst Benjamin Cowen believes that altcoins are not yet done with a downward trend against Bitcoin (BTC).
In a new video, Cowen tells According to its 788,000 YouTube subscribers, the bearish trend witnessed by altcoins in their Bitcoin pairs is regularly present ahead of the halving.
“Remember, what happens in the years before the halving when Bitcoin pumps? It breaks down altcoins from their Bitcoin support levels so that when Bitcoin goes back down, those altcoins simply have nowhere to hide. The altcoins just keep breaking down on their Bitcoin pairs and they are heading lower.”
The Bitcoin halving, which halves BTC miners’ rewards, takes place every four years, with the next one scheduled for April 2024.
To illustrate the extent to which altcoins have fallen in value against the leading crypto asset, Cowen shows the performance of Cardano versus Bitcoin (ADA/BTC) over the past year.
“Look at the ADA/BTC trend here. It goes up, then it goes down and sets a new low. It moves up and then drops and sets a new low. It moves up and then drops and sets a new low. About 40% drops approx. And it just keeps happening, it just keeps happening.
You should be aware of this trend. it’s a bold trend.”
Cowen also explains why he believes altcoins will continue to lose value against Bitcoin. The analyst says crypto market participants will likely continue to shift their capital away from altcoins in favor of BTC.
“The reason we see these [Bitcoin] pumping in the year before the halving is not because there is a lot of new liquidity on the market. It’s just because many people are converting their altcoins to Bitcoin.
For the first half of the year [before the halving year]There is enough liquidity in the altcoin market to continue leading to new yearly highs for Bitcoin/US dollar. But eventually the altcoin market dries up.”
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Generated image: Midjourney