• Benjamin Cowen warns that DeFi and altcoin markets could get caught up in a capitulation event soon.
• Pre-halving years Bitcoin historically increases for half the year and declines for the other half, “wrecking” bulls and bears.
• Bitcoin’s dominance (BTC.D) has increased while altcoin market has been struggling this year.
Benjamin Cowen Warns of a Potential Market Capitulation
Widely followed crypto analyst Benjamin Cowen is warning that the decentralized finance (DeFi) and altcoin markets could get caught up in a large capitulation event soon. In a new interview with Scott Melker, Cowen says that Bitcoin ( BTC ) will likely retrace the gains it put up in the first half of the year, dragging DeFi and altcoins down with it.
Bitcoin’s Performance During Pre-Halving Years
Cowen notes in pre-halving years Bitcoin historically increases for about half the year and declines for the other half, “wrecking” both the bulls and bears. “There’s a lot of excess liquidity just sort of like frothing around in the DeFi space and it wouldn’t take much for a lot of confidence to be lost there and there could be a windfall event. Bitcoin has gone up for the first half of the year. And if you look at the monthly returns of Bitcoin in pre-halving years, every single pre-halving year to date, 2011, 2015 and 2019, we’ve spent about half the year going up and half the year going down.” He adds that this time in 2023 five out of six months were green so far which was also seen previously in 2011 and 2019 before prices dropped again during five out six remaining months.
Altcoin Market Struggling So Far This Year
Cowen warns that altcoin market has been struggling this year as Bitcoin’s dominance (BTC.D), which measures king crypto’s share of total market capitalization of all digital assets, has increased significantly outperforming alts which have struggled with Bitcoin doubling its value leading to question what would happen to alts if BTC retraces any move? With this situation unfolding he predicts that bitcoin dominance would further increase as bitcoin/USD goes down draining more liquidity from alt markets.
Precautions Need To Be Taken By Investors
Given these uncertain times investors must be extra cautious while investing their money into such risky markets as they might get wrecked due to sudden dips or crashes seen across various digital asset markets including DeFi or Altcoins due to price fluctuations caused by changes happening within bitcoin or other external factors such as economic crisis or political instability etc .
The crypto world is ever changing environment where volatility can occur anytime without any prior notice so investors must keep an eye on current developments taking place within these markets & take necessary precautions accordingly .