Crypto will crash “worse than the NASDAQ in 2002” | Expert’s Last Warning
In a recent video interview with Quant Analyst Ben Cowen, he discusses the current state of the cryptocurrency market and warns of a potential crash worse than the NASDAQ in 2002. Drawing parallels to the dot-com crash, Benjamin suggests that the altcoin market is likely to continue declining until a Federal Reserve pivot occurs. Several altcoins, such as Avalanche, Polkadot, and Algorand, have already hit new lows, indicating a concerning trend. Benjamin speculates that the altcoin market may enter a depression phase, similar to the NASDAQ in 2002, and emphasizes the importance of considering altcoins’ performance against Bitcoin in assessing their potential interests.
According to Benjamin, altcoins have been bleeding against Bitcoin throughout the year, and the altcoin market tops out at parity with Bitcoin. He believes that the altcoin market could further decline against Bitcoin and potentially find a low at around 25% of Bitcoin’s market cap. Benjamin suggests that the altcoin market may bottom out against Bitcoin by the end of the year but advises caution as altcoins tend to bleed further in bear markets before experiencing aggressive comebacks in the middle and post-halving years. Overall, he highlights the importance of monitoring altcoins’ ability to hold their lows in a Bitcoin USD downtrend as a bullish sign for their future performance.
Altcoin Market Comparison to Dot-com Crash
The current state of the altcoin market is drawing comparisons to the dot-com crash of 2002, suggesting a similar pattern. As Quant Analyst Benjamin Cowen explains, the altcoin market seems to be on the verge of entering a depression phase. This comparison is based on the observation that the altcoin market is likely to continue declining until there is a Federal Reserve pivot.
Already, some altcoins have hit new lows, including Avalanche, Polkadot, and Algorand. These instances of new lows further support the idea that the altcoin market is following a similar pattern to the dot-com crash. If these prior lows do not hold, there may not be much support for the altcoin market.
Altcoin Market Performance Against Bitcoin
Throughout the year, altcoins have been bleeding against Bitcoin. This means that altcoins have been losing value relative to Bitcoin. The market has reached a point where the altcoin market tops out at parity with Bitcoin.
According to Cowen, the altcoin market is expected to continue declining against Bitcoin. This suggests that altcoins will continue to lose value relative to Bitcoin in the near future. However, there is potential for the altcoin market to find a bottom around 25% of Bitcoin’s market cap. This means that altcoins may have an opportunity for recovery by the end of the year.
Ether Bitcoin Pair Analysis
The Ether Bitcoin pair is currently in a bearish distribution phase. Cowen predicts that the ratio between Ether and Bitcoin may drop to around 0.03 to 0.04 before the altcoin market bottoms out. The price of Ethereum is heavily influenced by the Ether Bitcoin ratio. Therefore, a drop in the ratio may impact the price of Ethereum.
Ethereum Dominance
Ethereum dominance, which refers to the percentage of the total cryptocurrency market cap that Ethereum holds, has been gradually declining. While there is a chance that Ethereum dominance could go back below 10%, Cowen believes that it will not reach the levels seen in September 2019. The price of Ethereum largely depends on the Ether Bitcoin ratio, which may decrease before it starts to increase again.
XRP Bitcoin Valuation
XRP’s Bitcoin valuation seems to fluctuate within a defined range. However, the outlook for XRP is bearish due to the current state of the Bitcoin market. If XRP USD fades back to 40 cents, it may have a significant impact on the altcoin market. Additionally, any legal regulatory news regarding XRP could potentially change the outlook for the altcoin market as a whole.
Excess Liquidity and Altcoin Market
The altcoin market relies more on excess liquidity rather than prevailing narratives. As liquidity is taken out of central banks, the altcoin market tends to decline. This suggests that the performance of altcoins is closely tied to the availability of liquidity in the market.
Additionally, Cowen emphasizes that less emphasis should be placed on narratives surrounding altcoins. Instead, the focus should be on the liquidity in the market and its impact on altcoin performance.
BNB Bitcoin Analysis
BNB Bitcoin analysis shows a slow downward trend. There is a potential for a breakdown and a retesting of support levels. If these support levels do not hold, it may impact Bitcoin dominance. A retracement in BNB could cause Bitcoin dominance to increase.
Determining Altcoin Interests
To determine potential altcoin interests, it is important to focus on Bitcoin pairs. Altcoins that are able to hold their lows in a Bitcoin USD downtrend tend to perform well in future Bitcoin bull runs. This ability to hold lows in a Bitcoin USD downtrend is considered a bullish sign for altcoins.
Dot Bitcoin and Sol Bitcoin are examples of altcoins that are trying to hold their lows, suggesting potential interest in these coins. However, it is still uncertain if altcoins have bottomed on their Bitcoin pairs.
Altcoin Behavior in Bear Markets
In bear markets, altcoins tend to bleed further but then recover aggressively. This behavior is similar to previous market situations, where there was a continued bleed followed by a rally into a recession. The current market situation is reminiscent of four years ago, with a continued bleed followed by a rally into a recession.
During a recession, the Federal Reserve is likely to print, leading to liquidity returning to the market. This liquidity could potentially bring success to altcoins.
Conclusion
Based on the comparison to the dot-com crash and the current performance of altcoins, there is a potential for a crash in the altcoin market. The altcoin market may continue to decline until a Federal Reserve pivot occurs. However, there may be a possibility of recovery during a recession, as liquidity returns to the market. Investors should closely monitor the altcoin market and consider these factors when making investment decisions.
