Summary
Ben Cowen believes we are entering a decisive phase in crypto.
The macro market spells more trouble for altcoins.
The largest alt, ETH, may still see a considerable correction.
Liquidity is key, more so than fundamentals, according to the analysts.
Benjamin Cowen, known for his thorough market analysis on his YouTube channel and on X, has shared his latest insights into where the crypto markets are trending. In a post, he stated that as Bitcoin (BTC) price drops, Bitcoin becomes the more dominant asset. This is based on altcoins dropping more than BTC, which he believes is the worst part of the market cycle.
We’ve been discussing this phase of the market cycle for a while.
Namely, where #BTCdrops, but BTC dominance goes up, because altcoins are dropping more.
It is always the most brutal part of the market cycle. pic.twitter.com/ueLIcwUkOw
— Benjamin Cowen (@intocryptoverse) October 9, 2023
Downtrend and Altcoin Performance
In a YouTube video with long-time trader Gareth Soloway, Cowenconfirmedthat he believes we are in what he calls “that brutal phase of the market.”
According to Cowen, we are currently seeing Bitcoin putting in lower highs, indicating a continued downtrend. While Bitcoin goes down, Bitcoin pairs are going down even faster. This shows the increasing dominance of Bitcoin and the fast price decline in altcoins.
Source: TradingView.com
Other Influencing Factors and a Looming Recession
Contrary to Fed Chair Jerome Powell, who said the Fed does not believe a recession is coming, both Cowen and Soloway believe otherwise. The analysts, who have decades of experience between them, feel that a recession is very much on the cards.
They base this on U.S. labour market data, which despite job growth shows that more people are in part time work. Cowen also referred to what’s known as “higher for longer”. This refers to the fact that when interest rates remain high for prolonged periods, businesses start to cut cost.
Soloway also pointed out that Bitcoin is not the digital gold it so often is compared to. At the time of the Video, Gold was up, and Bitcoin down.
Soloway said, “Bitcoin is obviously not the digital gold yet, otherwise it would be up, with Gold. Bitcoin is clearly still somewhat of a risk asset, which is clearly seen by the chart.”
When Markets are Down, Altcoins are More Risky
Due to decreased liquidity, Soloway argued that no matter how strong altcoin fundamentals are, alts are going to have a hard time. Cowen agreed, saying without liquidity, fundamentals don’t mean much at all.
Source: TradingView.com
The analysts also agreed that the current wedge forming on the Ethereum/ Bitcoin chart is very much resembling the situation in the last bear market and could mean a further downward trend close to US $1,000 ($1,559).
Cowen said,
ETH/BTC collapse is continuing. It has been a pretty slow process so far, certainly slower than I was expecting; but the trend has in fact been down for a long time.
Ben Cowen
