The “Secondary Scare” Phenomenon
Renowned crypto analyst Dr. Benjamin Cowen recently discussed Bitcoin’s current market behavior and its connection to the S&P 500 stock index. Cowen introduced the concept of the “secondary scare” in the crypto world, comparing it to the S&P 500’s tendency to experience corrections in August or September of its pre-election year.
Bitcoin’s Historical Behavior
Looking at historical data, Cowen highlighted that Bitcoin has experienced significant drops during past “secondary scares.” He provided examples such as a 61% decline in 2019 and an 82.5% drop in 2011. In all these instances, the S&P 500 also experienced a drop in the third quarter of the pre-election year, followed by a Bitcoin downtrend.
Potential Scenarios for Bitcoin’s Decline
Based on historical patterns, Cowen presented three potential scenarios for Bitcoin’s decline: a 40% drop, a 61% decline, and an 80% drop. The likelihood of an 80% drop, according to Cowen, is highly unlikely.
Influence of Excess Liquidity on Altcoin Prices
Cowen discussed the impact of excess liquidity on altcoin prices. He emphasized that events like court case outcomes, such as the SEC vs. Ripple ruling, do not have a lasting effect on price hikes. Cowen believes that the value of altcoins is more influenced by the presence of excess liquidity in the market, indicating a surplus of investable funds.
Hot Take
Dr. Benjamin Cowen’s analysis suggests that Bitcoin may experience a decline following the patterns of past “secondary scares.” However, the influence of excess liquidity on altcoin prices showcases the importance of market conditions beyond individual events. It is crucial for crypto readers to consider these factors when assessing the behavior of cryptocurrencies in the market.
By
By
By
By
By