Expert Warns Against Buying Altcoins, Here’s Why
In an environment dominated by market volatility, Benjamin Cowen, CEO and founder of Into The Cryptoverse, issued a warning. His views, shared on social media platform X, offer a different perspective on the current state of altcoins and the broader market landscape.
Benjamin Cowen Advises Not to Buy the Drop in Altcoins
Cowen’s cautionary narrative begins with a retrospective look at historical market trends, particularly the troubling parallels with the events of 2019. It highlights the critical juncture when the Ethereum to Bitcoin ratio dropped just before the 70% correction in the altcoin market.
This precedent underpins Ethereum’s concerns about the recent deterioration in its relationship with Bitcoin. Additionally, the ETH/BTC pair broke support two days ago, which increases the risk of a repeat of the past pullback. The dialogue initiated by Cowen’s comment sparks a discourse among users.
One observer noted that many altcoins have already experienced declines of 70%. But Cowen warned against further declines. “Just because one subunit is down 70% doesn’t mean it can’t go down another 70%.”
At the heart of Cowen’s analysis is the concept of Bitcoin dominance, which he predicts could rise to 60%. Drawing on historical market cycles, he highlighted the inverse relationship between Bitcoin’s dominance and the fate of altcoins. Therefore, it suggests that there is an upcoming period of turbulence for the altcoin sector.
Despite some users’ claims about the ongoing bull market, Cowen remains firm in his analysis. He noted Bitcoin’s meteoric rally in the first half of 2019, which preceded the altcoin correction. He also underlined that the rise coincides with macroeconomic indicators such as the Fed’s interest rate cuts and the rise of gold.
Also on: Top 3 Tier 1 Altcoins to Buy to Turn $1,000 into $5,000 BTC Halving Week
Matrixport Reflects Emotions
In a recent analysis, Cowen identified a potential bottom in Ethereum’s ratio against Bitcoin. This signals a long period of market consolidation ahead. “We now officially have a one-week close below the June 2022 low,” he wrote. “Potential bottom for ETH/BTC this summer after remaining in a bear market since November 2021,” Cowen added.
He also added, “The timing may vary, but this has happened the last 2 times, the final submission process took 2-3 months.” This declining ratio of ETH/BTC could lead to a massive decline in altcoins; This sentiment was also expressed by digital asset platform Matrixport. “Some have argued that we should be on the verge of an altcoin boom,” Matrixport noted in a post about X.
They have vehemently denied such claims due to the growing dominance of Bitcoin. They wrote: “Although a handful of meme-coins and altcoins have experienced major rallies, the overall rally may still be in its infancy based on the #Bitcoin dominance rate.” Matrixport added that these show that the bull market is very narrow and Bitcoin is gaining even more market share.
Also Read: Bitcoin Dominance Hits Three-Year High; What will happen next?
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