A well-known cryptocurrency analyst predicts a meltdown for altcoins, citing a key metric that suggests they have much further to fall.
In a new video update, crypto strategist Benjamin Cowen warns his 780,000 subscribers that an altcoin reckoning is on the way because Bitcoin’s (BTC) dominance chart (BTC.D) remains low.
The BTC Dominance graph shows how much of the total cryptocurrency market capitalization is owned by Bitcoin. Cowen believes that the altcoin market will remain a falling knife until BTC.D resolves to the upside.
“One of the things that [has] kept me really bearish on the altcoin market is of course the Bitcoin dominance. [It is] still very low, and it is now at 42% if stablecoins are excluded…
Despite the fact that dominance is still low, this is what has kept me from purchasing altcoins this year. This is what has kept me from saying in 2022, ‘Look guys, I know you like the shiny altcoin objects in a bull market, but they are not your friends in a bear market, don’t marry an altcoin.’
I recognise that dominance is still low, but I will say that this metric is what has kept me from buying altcoins in large part, and it has worked out pretty well so far.”
The dominance of altcoins in the crypto markets suggests that traders are still speculating on digital assets other than Bitcoin.
Cowen uses Cardano (ADA) as an example of a prominent altcoin that could fall, noting the crypto asset’s massive price drop over the last year.
“The idiosyncratic risk of a single altcoin is simply not worth it, and ADA is now down 92%, but during the previous bear market, ADA dropped 98%, nearly 99% from the all-time high. It gives you an idea of how bad things became.
If [ADA] dropped by 98.77%, it would return to $0.04.”
At the time of writing, Bitcoin is worth $16,524 and ADA is worth $0.245.
