Crypto strategist Benjamin Cowen says the strength of the stock market may determine the short-term future of all crypto assets aside from Bitcoin.
In a new strategy session, Cowen tells his 784,000 YouTube subscribers that the risk-off stance that stocks appear to have adopted could negatively impact altcoins if it continues.
A risk-off stance indicates that investors are either staying on the sidelines or pulling out their capital.
Says Cowen,
“If the S&P 500 [index] remains risk-off for long enough, which it tends to do in August or September of the pre-election year, it can lead to Bitcoin going below the 20-week SMA (simple moving average) and staying there in August or September of the pre-election year, which would then, in turn, lead to the capitulation of the altcoin market.
And if the altcoin market if TOTAL3 [the market cap of all cryptocurrencies except Bitcoin and Ethereum], can’t even be bothered to take out its October 2022 high in a risk-on environment, then of course it could go put in a new low in a risk-off environment.”
On when altcoins could turn bullish, Cowen says,
“The Bitcoin dominance is now above 50%. And I’ve said many times that altcoin accumulation, in my opinion, not financial advice, should not really start until the Bitcoin dominance is at 60%. We’re not at 60%. Therefore, I don’t think it’s time for the altcoin market.”
The Bitcoin (BTC) dominance (BTC.D) chart tracks the percentage of the total crypto market cap that belongs to the crypto king.
Turning to Bitcoin, Cowen says that the flagship crypto asset faces an ominous future ahead of the halving scheduled for April 2024.
“I think there’s a good chance that Bitcoin gets that secondary scare. A lot of times Bitcoin gets a secondary scare.
And in fact, if you look at every prior high by Bitcoin in the pre-halving year, we have always seen at least a 40% to 50% correction before the halving. Always.”
At time of writing, Bitcoin is trading for $28,587.
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