Into The Cryptoverse founder Benjamin Cowen predicts Bitcoin BTC/USD dominance to reach 60% before the end of 2024, signaling the end of a multi-year trend and potential shifts in the crypto 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 advancements or market sentiment.
Cowen explains that during periods of tighter monetary policy, investors tend to flee higher-risk assets for lower-risk options within each asset class. This has benefited Bitcoin at the expense of altcoins over the past few years.
The analyst points to several key indicators supporting his thesis:
1. Historical Patterns: Bitcoin dominance has typically increased for three years before declining in the fourth year, coinciding with retail investor influx.
2. All-Bitcoin Pairs: Many altcoins continue to lose value against 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 top for 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 “alt season.”
Also Read: Bitcoin’s Last Downturn Put Sentiment On ‘Suicide Watch,’ But Experts See A Silver Lining
Why It Matters: Cowen cautions that while the dominance trend has been consistent, timing the exact top is challenging. He suggests September or December as likely timeframes for Bitcoin dominance to peak around 60%.
The analyst emphasizes the importance of understanding these cycles for preserving wealth in the crypto market. He notes that many investors who entered during altcoin rallies may have become “Bitcoin maxis” after experiencing the multi-year dominance trend.
As the crypto 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.
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
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