Analyst Benjamin Cowen Warns of Potential Bitcoin Price Drop
Crypto analyst Benjamin Cowen is cautioning that Bitcoin (BTC) may experience a significant price decline leading up to the halving event in April 2024. Speaking in an interview, Cowen highlights that Bitcoin has historically dropped by 50% before previous halvings. While he does not explicitly predict such a drop this time, a 50% decrease from the last high would place Bitcoin around $15,000.
Possible Reasons for a Major Downward Move
Cowen suggests that one of the reasons for a potential downward move is the decreasing liquidity in the cryptocurrency and risk asset markets. He believes that as altcoin market liquidity dries up, it could impact Bitcoin. Furthermore, he points out that the total market capitalization remains stagnant, indicating limited new money entering the space. Cowen also highlights the collapsing ETH/Bitcoin pair as a driver of funds moving from altcoins to Bitcoin.
Current Market Status
At present, Bitcoin is trading at $28,527, while the ETH/BTC pair is trading at 0.05532 BTC ($1,578).
Hot Take: Bitcoin’s Potential Price Drop
According to analyst Benjamin Cowen, Bitcoin could face a substantial price drop before next year’s halving event. Historically, Bitcoin has experienced a 50% decline prior to previous halvings. Although Cowen does not make an explicit prediction for this cycle, a 50% drop from its last high would bring Bitcoin’s price close to $15,000. One of the potential factors contributing to this downside move is the decreasing liquidity in both crypto and risk asset markets. Additionally, stagnant market capitalization and a declining ETH/Bitcoin pair suggest limited new money entering the space and a shift from altcoins to Bitcoin.
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