Founder of Into The Cryptoverse Benjamin Cowen predicted Bitcoin Bitcoin/USD dominance is expected to reach 60% before the end of 2024, signaling the end of a multi-year trend and potential changes in the cryptocurrency market landscape.
What happened: Cowen argues that Bitcoin dominance, which measures Bitcoin’s market share relative to all cryptocurrencies, is in its “final stretch” of a rally that began in 2021. He attributes this trend primarily to monetary policy rather than technological advances or market sentiment.
Cowen explains that during periods of monetary policy tightening, investors tend to flee higher-risk assets in favor of lower-risk options within each asset class. This trend has benefited Bitcoin at the expense of altcoins in recent years.
The analyst points out several key indicators that support his thesis:
1. Historical models: Bitcoin dominance typically increased for three years before declining in the fourth year, coinciding with the influx of retail investors.
2. All Bitcoin Pairs: Many altcoins continue to lose value relative to Bitcoin, suggesting further room for dominance growth.
3. Federal Reserve Policy: Cowen believes the Fed will likely cut rates later this year, potentially marking the peak of Bitcoin dominance.
4. Technical analysis: Bitcoin dominance is approaching the 61.8% Fibonacci retracement level, which served as resistance in previous cycles.
Despite his bullish outlook on Bitcoin dominance in the short term, Cowen anticipates a reversal in 2024. He expects looser monetary policy to benefit altcoins and potentially trigger a new “altcoin season.”
Also read: Bitcoin’s latest downturn has sentiment on ‘suicidal watch,’ but experts see a silver lining
Why it matters: Cowen warns that while the dominance trend is consistent, it is difficult to pinpoint when the price will peak. He suggests that September or December are the most likely times for Bitcoin dominance to peak at around 60%.
The analyst stresses the importance of understanding these cycles to preserve wealth in the cryptocurrency market. He notes that many investors who entered the market during altcoin rallies may have become “Bitcoin maxis” after experiencing the multi-year dominance trend.
As the cryptocurrency market potentially approaches a turning point, Cowen’s analysis provides valuable insights for investors navigating the complex relationship between Bitcoin, altcoins, and broader economic factors.
And then?:Bitcoin’s influence as an institutional asset class is set to be explored in depth at Benzinga’s upcoming Future of Digital Assets event on November 19.
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