Bitcoin analyst Benjamin Cowen predicts that Bitcoin’s dominance within the cryptocurrency market will reach a whopping 60% by the end of 2024. This signifies a significant shift in the crypto landscape, marking the culmination of a multi-year trend. Cowen attributes this dominance surge primarily to monetary policy, rather than technological advancements or market sentiment. He explains that during periods of tighter monetary policies, investors tend to favor lower-risk assets within each asset class, driving them towards Bitcoin at the expense of altcoins. This trend has been evident over the past few years.
Cowen presents several key indicators to support his thesis:
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Historical Patterns:
Bitcoin dominance has historically exhibited a pattern of increasing for three years before declining in the fourth year, often coinciding with an influx of retail investors.*
All-Bitcoin Pairs:
Many altcoins continue to lose value against Bitcoin, indicating potential for further dominance growth.*
Federal Reserve Policy:
Cowen believes the Federal Reserve will likely cut rates later this year, potentially signaling the peak for Bitcoin dominance.*
Technical Analysis:
Bitcoin dominance is approaching the 61.8% Fibonacci retracement level, a level that acted 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 policies to benefit altcoins, potentially triggering a new “alt season.”
Cowen cautions that while the dominance trend has been consistent, predicting the exact peak is challenging. He suggests September or December as possible timeframes for Bitcoin dominance to peak around 60%. Understanding these cycles, he emphasizes, is crucial for preserving wealth in the crypto market. Many investors who entered during altcoin rallies may have become “Bitcoin maxis” after witnessing the multi-year dominance trend.
As the crypto market potentially approaches a turning point, Cowen’s analysis offers valuable insights for investors navigating the complex relationship between Bitcoin, altcoins, and broader economic factors.
