Analyst Warns Altcoins Could Face Trouble as Crypto Market Crashes and ‘Buy the Dip’ Strategy Emerges
Altcoin prices have experienced a significant decline, with multiple cryptocurrencies among the top twenty falling by more than 15 percent. However, the overall market cap of the global cryptocurrency market has increased by 3.93 percent in the past 24 hours, reaching a total of $2.38 trillion.
Today, Bitcoin’s market cap stands at $1.28 trillion, accounting for 53.92 percent of the total market value. This is the highest it has been since April 2021. The surge in Bitcoin’s dominance is reshaping the market dynamics and leading to a loss in market share for altcoins. Despite influencers urging investors to buy the dip in altcoins, one analyst warns against it.
Benjamin Cowen, CEO of Into The Cryptoverse, advises against purchasing altcoins during a market correction. He points to historical trends and draws comparisons to the 2019 decline in altcoins, which was triggered by Ethereum’s struggle against Bitcoin. Cowen has previously cautioned that if the Federal Reserve lowers interest rates, it could lead to a significant drop in the crypto market this quarter. He specifically expresses concerns about altcoins and suggests that investors proceed with caution.
Furthermore, Cowen emphasizes the importance of Bitcoin dominance and predicts a potential increase to 60%. He believes this aligns with historical patterns of altcoin downturns. Despite claims of an ongoing bull market, Cowen remains wary, citing instances in the past when Bitcoin’s rise coincided with declines in altcoins, often influenced by macroeconomic events such as actions taken by the Federal Reserve.
Matrixport, a digital assets platform, shares Cowen’s view and highlights the growing dominance of Bitcoin as a signal of a limited bull market. Disagreeing with predictions of an upcoming altcoin rally, Matrixport suggests that Bitcoin might maintain its market dominance, reducing the likelihood of significant gains for altcoins overall.
Over the weekend, several major altcoins experienced a drop in prices. Ethereum decreased by 1%, Solana by 4%, Dogecoin by 3%, Cardano by 3.41%, Avalanche by 3.74%, and Shiba Inu by approximately 3.95%. Additionally, Bitcoin’s price fell by almost 8%, dropping from around $70,000 on April 12 to $62,000 on April 16.
Both Cowen and Matrixport’s analyses indicate a period of potential turbulence for altcoins and advise investors to consider Bitcoin’s dominance and historical patterns before making investment decisions.