Title: The Future of the Crypto Market: Insights and Predictions
Introduction:
The crypto market is often compared to a battlefield, with the divide between bearish and bullish trends becoming increasingly pronounced. Benjamin Cowen, a crypto analyst, has made predictions about the future of the market, highlighting the strengthening dominance of BTC and ETH and drawing parallels between the ALT/BTC trend and the summer of 2019.
Key Points:
1. BTC dominance is on the rise.
2. Blue-chip tokens are set to further increase their dominance.
3. ETH/BNB/TON show resilience in the face of market trends.
4. The impact of ETH spot ETF may be overstated.
5. Once market attention hits rock bottom, altcoins may rebound.
6. The influence of ETFs on Bitcoin:
– The surge in ETF holdings has not translated into positive price movement for Bitcoin.
– Cowen believes that the crypto market’s scale far exceeds that of ETF flows, and there are other overlooked sources of liquidity, such as experienced whale investors.
The Fascination with ETFs:
The enthusiasm for ETFs is largely driven by personal biases. Ironically, supporters of the “not your keys, not your coins” philosophy are also pushing for ETFs. This inconsistency reveals the role of a crucial force: the theory of reflexivity, where the price of an asset is determined by people’s expectations.
Outlook for Altcoins:
The altcoin market is currently at a critical support level, and a breakthrough to the downside may trigger further declines. Cowen’s pessimistic view focuses on market attention, as altcoins thrive on attention, shaping their narrative and price trends. The low Total Social Risk index indicates minimal retail interest.
When Will ALT/BTC Bottom Out?
ALT/BTC may bottom out once the Total Social Risk index reaches a lower low. The current market situation is similar to the period before the Federal Reserve’s interest rate cut in the summer of 2019. Social interest rebounded before the halving events in 2019 and 2024 but declined afterward.
The Advance-Decline Indicator (ADI):
ADI provides a visual representation of altcoin capitalization by analyzing the ratio of daily advancing tokens to declining tokens. Recent market trends indicate a higher number of declining altcoins compared to advancing ones. It is advisable not to go against the trend.
BTC – Calm in the Storm:
Despite Cowen’s bearish stance on most altcoins, BTC demonstrates resilience. He also emphasizes the relative strength of ETH, BNB, and UNI.
The Weakness of Total3:
The Total3 index (the total market capitalization of all cryptocurrencies excluding BTC and ETH) is still below its 20-week moving average. This doesn’t mean that altcoins have vanished, but selective investment is crucial.
Small Caps vs. Large Caps:
Another interesting observation is the comparison between OTHER – Total3 and OTHERs, which analyzes the performance of low-market-cap altcoins against high-market-cap altcoins. Recently, higher-market-cap altcoins have outperformed others, and Cowen predicts further declines for low-market-cap altcoins, similar to mid-2022.
Will Bitcoin’s Dominance Peak Soon?
BTC’s dominance has not peaked yet, as it has not fallen below its 20-week moving average. Bitcoin remains stable between $60,000 and $70,000, while other tokens experience declines.
BTC Dominance Trend:
A notable characteristic of this cycle is the lack of a widespread altcoin rally, leading to an overall increase in BTC dominance.
Blue-Chip Tokens Take the Lead:
This trend also extends to blue-chip tokens, with the dominance of BTC and ETH on the rise. The projected figure is expected to approach 73% and may even reach the upper limit of 80%. The current market data stands at around 73% and has entered the upper range.
BTC Dominance (Excluding ETH):
The recent decline in BTC dominance is solely attributed to the hype around ETH spot ETF. Excluding ETH, BTC’s dominance remains strong.
Outlook for ETH/BTC:
The hype around the spot ETF may temporarily boost ETH, but in the long run, Cowen expects ETH/BTC to exhibit a downward trend. This is due to the unchanged monetary policy in the United States, despite Bitcoin’s impressive performance during challenging times.
When Will ETH/BTC Bottom Out?
ETH/BTC may bottom out once the Federal Reserve’s interest rate cut or quantitative tightening ends, but these events have yet to occur. In the context of restrictive monetary policy, BTC’s performance may surpass that of ETH.
Conditions for Failed Predictions?
Cowen remains open to the possibility of ETH’s strong performance, especially if ETH/BTC remains in the bullish range in July. It is worth noting that Cowen did not predict the price surge of ETH at the end of May, which may lead to another erroneous prediction.
Conclusion:
In the crypto field, pessimistic views often appear more rational than optimistic ones. However, it is important not to forget the irrational nature of the market. Strong reflexivity can trigger significant price fluctuations in an instant.
