Should You Still Buy the Dip as Bitcoin Dominates and Altcoins Plummet?
In a surprising turn of events in the cryptocurrency world, altcoin prices plummeted by more than 15 percent across the top twenty cryptocurrencies. However, despite this decline, the overall global cryptocurrency market cap managed to increase by 3.93 percent in the past day, reaching a substantial $2.38 trillion.
As the dust settles, Bitcoin emerges as the clear leader, with its market cap skyrocketing to $1.28 trillion, accounting for a staggering 53.92 percent of the total market value. This level of dominance has not been seen since April 2021 and is reshaping the landscape, causing altcoins to lose their grip.
Amidst the frenzy to “buy the dip,” one expert urges caution. Benjamin Cowen, CEO of Into The Cryptoverse, advises against investing in altcoins during this market correction. He points to historical trends, drawing parallels with the 2019 downturn triggered by Ethereum’s struggles against Bitcoin, which resulted in altcoins dropping by more than 70 percent over the next 6-9 months.
Cowen’s concerns go beyond market fluctuations. He warns of potential consequences if the Federal Reserve decides to cut interest rates, predicting a possible market crash this quarter, particularly for altcoins. Emphasizing the significance of Bitcoin’s dominance, Cowen anticipates a potential rise to 60 percent, historically indicating trouble for altcoins.
Supporting Cowen’s perspective, Matrixport, a leading digital assets platform, sees Bitcoin’s increasing dominance as a sign of a restrained bull market. Contrary to optimistic predictions of an altcoin resurgence, Matrixport suggests that Bitcoin may maintain its supremacy, dampening hopes of significant altcoin gains.
Over the weekend, major altcoins faced the consequences of the market turbulence, with Ethereum, Solana, Dogecoin, Cardano, Avalanche, and Shiba Inu all experiencing declines ranging from 1 percent to 4 percent. Adding to the losses, Bitcoin itself saw a significant drop, losing nearly 8 percent of its value, falling from around $70K on April 12 to $62K on April 16.
Given the cautionary analyses of Cowen and Matrixport, investors are advised to proceed with caution, taking into account Bitcoin’s growing dominance and historical patterns before making any investment decisions.