According to crypto analyst Benjamin Cowen, altcoins are still in a downtrend against Bitcoin (BTC).
In a recent video, Cowen tells his 788,000 YouTube subscribers that it is normal for altcoins to experience a bearish trend in their Bitcoin pairs before the halving.
“Remember, in pre-halving years, when Bitcoin pumps, altcoins lose their Bitcoin support levels, leaving them with nowhere to go. Altcoins continue to decline against Bitcoin and reach lower levels.”
The Bitcoin halving, which occurs every four years and reduces miners’ rewards by half, is scheduled for April 2024.
To illustrate how much altcoins have depreciated against Bitcoin, Cowen compares the performance of Cardano against Bitcoin (ADA/BTC) over the past year.
“Look at the ADA/BTC trend here. It goes up, then down and hits a new low. It goes up, then down and hits a new low. It keeps happening, with drops of approximately 40%. It’s a brutal trend.”
Cowen also explains why he believes altcoins will continue to lose value against Bitcoin. He says that market participants are likely shifting their capital from altcoins to Bitcoin.
“The reason we see these pumps in the pre-halving year is not because new liquidity is coming into the market. It’s because people are converting altcoins to Bitcoin.
In the first half of the year (before the halving), there is enough liquidity in the altcoin market to push Bitcoin/US dollar to new yearly highs. But eventually, the altcoin market runs out of steam.”
Please note that The Daily Hodl’s opinions are not investment advice, and investors should conduct their own research before making high-risk investments in Bitcoin, cryptocurrency, or digital assets. Transfers and trades are made at your own risk, and any losses are your responsibility. The Daily Hodl does not endorse the buying or selling of cryptocurrencies or digital assets, and is not an investment advisor.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Source: Benjamin Cowen/YouTube