Bitcoin’s Rally Likely to Lead to a Correction, Says Analyst
Crypto analyst Benjamin Cowen predicts that Bitcoin’s recent rally will be followed by a significant correction before the actual bull market begins. Cowen explains that the current surge in Bitcoin’s price is not due to new capital entering the market, but rather traders converting their altcoins into BTC. As liquidity from altcoins diminishes, Bitcoin will lose its buying pressure and experience a sell-off. Cowen expects BTC to face resistance at nearby levels and trigger a decline that will impact altcoins as well. He emphasizes that historical patterns indicate a drop in Bitcoin’s value before the halving event, as liquidity disappears from the altcoin market.
Bitcoin Dominance and Altcoins
Cowen points out that Bitcoin’s rise is driven by investors exchanging their altcoins for BTC, which increases Bitcoin’s dominance in the market. However, once liquidity in the altcoin market dries up, there will no longer be enough demand to support Bitcoin’s rally. When Bitcoin enters a risk-off environment and loses its bid, it will result in a drop in price that will negatively affect the altcoin market. After this final drop, altcoins are expected to outperform over the following three to six months.
Bitcoin’s Current Price
At the time of writing, Bitcoin is trading at $30,734.
Hot Take: Potential Correction on the Horizon
According to Benjamin Cowen, an expert crypto analyst, it is likely that Bitcoin’s current rally will be followed by a substantial correction before the full-fledged bull market takes hold. The surge in Bitcoin’s price is not due to fresh capital entering the space; rather, it stems from traders converting their altcoins into BTC. As liquidity from altcoins diminishes, Bitcoin will lose its buying pressure, resulting in a sell-off. Cowen anticipates that BTC will encounter resistance at nearby levels and trigger a downturn that will affect altcoins as well. Historical patterns suggest that Bitcoin’s value typically drops before the halving event due to liquidity disappearing from the altcoin market.
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