A well-known crypto analyst, Benjamin Cowen, is closely monitoring the potential impact of Federal Reserve rate cuts and upcoming economic data releases on the digital asset market, specifically Bitcoin and altcoins. He suggests that if the Federal Reserve initiates rate cuts in response to economic indicators, such as the March CPI and FOMC minutes scheduled for this week, the market could experience a correction in the second quarter. Analysts warn that a larger correction may be on the horizon, causing concern for altcoins.

Let’s take a closer look.

Could Fed Rate Cuts Spark a Correction?

Cowen explains that a decrease in the value of altcoins compared to Bitcoin, as indicated by the alt/Bitcoin pairs, could signify increasing recessionary pressures. If this occurs, altcoins may lose value in relation to Bitcoin. When assessing the strength of the altcoin market, Cowen emphasizes the importance of monitoring the TOTAL3 versus Bitcoin pair. This pair reflects the market capitalization of all digital assets apart from Bitcoin, Ethereum, and stablecoins.

In addition to economic factors, Cowen highlights the significance of the upcoming Bitcoin halving. This event will reduce the block reward and lower the yearly inflation rate. Despite this decrease, Cowen suggests that high miner revenue, driven by Bitcoin’s price appreciation, will maintain profitability for miners and ensure the network remains secure.

Altcoins’ Decline: A Test of Crypto Confidence?

Furthermore, Cowen discusses the potential impact of the timing of rate cuts on Bitcoin dominance (BTC.D), which measures Bitcoin’s share of the overall crypto market. He notes that if rate cuts are delayed until July, it could result in a continued increase in Bitcoin dominance, indicating a bearish trend for altcoins.

Looking Ahead

In general, during a bull market, prices tend to rise, primarily driven by Bitcoin. Corrections do occur, but they are typically not severe, usually around 20% or less. Currently, Bitcoin’s correction stands at around 17.5%, suggesting that there is still room for growth. If Bitcoin goes up, so do altcoins. Selling now could prove to be a costly mistake if the bull market continues its upward trajectory.

So, what will be your strategy in this bull market? Will you hold or sell?

Tags:
Bitcoin
Price Analysis

An influential crypto analyst, Benjamin Cowen, is closely monitoring the potential impact of rate cuts by the Federal Reserve and upcoming economic data releases on the digital asset market, specifically Bitcoin and altcoins. He suggests that the market may experience a correction in the second quarter if the Federal Reserve implements rate cuts in response to economic indicators such as the March CPI and FOMC minutes scheduled for this week. Analysts warn that, based on market sentiments, a significant correction may be on the horizon, which could pose a challenge for altcoins.
Advertisement
Let’s delve into the details.
Could Fed Rate Cuts Spark a Correction?
As Cowen explains, a decrease in the value of altcoins compared to Bitcoin, as indicated by the alt/Bitcoin pairs, could indicate an increase in recessionary pressures. This means that altcoins may lose value relative to Bitcoin. When assessing the strength of the altcoin market, Cowen emphasizes the importance of monitoring the TOTAL3 versus Bitcoin pair, which reflects the market capitalization of all digital assets excluding Bitcoin, Ethereum, and stablecoins.
In addition to economic factors, Cowen highlights the significance of the upcoming Bitcoin halving, which will reduce the block reward and lower the yearly inflation rate. Despite the reduced emission rate, Cowen suggests that the profitability of miners and the network’s security will remain strong due to high miner revenue driven by Bitcoin’s price appreciation.
Altcoins Declining: A Test of Crypto Confidence?
Furthermore, Cowen discusses how the timing of rate cuts could impact Bitcoin dominance (BTC.D), which measures Bitcoin’s share of the overall crypto market. He notes that a delay in rate cuts until July could lead to a further increase in Bitcoin dominance, signaling a bearish trend for altcoins.
Future Outlook
In general, during a bull market, prices tend to rise, primarily driven by Bitcoin. Corrections do occur, but they are typically not severe, usually around 20% or less. Currently, Bitcoin’s correction stands at approximately 17.5%, indicating that it still has room for growth. If Bitcoin rises, altcoins tend to follow suit. Selling at this point could be a costly mistake if the bull market continues its upward trajectory.
So, in the bull market, will you choose to hold or sell? What will be your strategy?
Tags
Bitcoin
Price Analysis