A well-known crypto analyst is sounding the alarm. He believes that altcoins could face a tough time for the rest of 2024.
In a recent video update, Benjamin Cowen shared his insights with his 813,000 YouTube followers. He pointed out that, based on historical trends, altcoins might drop significantly as the year comes to a close. This decline could happen especially in comparison to Bitcoin (BTC).
Interestingly, Cowen noted that this potential drop aligns with the start of a new cycle of interest rate cuts. He drew comparisons to past cycles, particularly from 2018 to 2020. During that time, the trend line was touched three times, and the third touch marked the market's bottom.
He explained, “The current interest rate cycle has taken longer than expected. If we connect the dots again, that third touch might happen by the end of this year. This trend line suggests a value of 0.25 in the fourth quarter. I believe alt/Bitcoin pairs will capitulate before the year ends.”
According to Cowen, altcoins are likely to struggle against Bitcoin due to low global liquidity. He emphasized that this is a major factor affecting digital asset prices. “You need to consider what’s driving this decline. One key factor is net liquidity. If you look at the global net liquidity, it has been showing lower highs and lower lows for a while now,” he stated.
He further explained, “If you overlay this chart with alt/Bitcoin pairs, you can see that they broke down at the same time net liquidity experienced a fake breakdown.”
In summary, Cowen’s insights suggest that the end of 2024 might be challenging for altcoins, especially in relation to Bitcoin.