Altcoins
What the FOMC meeting means for Bitcoin’s next move
Cryptocurrency Analyst Benjamin Cowen shared ideas on the potential impact of Federal Open Market Committee (FOMC) meeting on the cryptocurrency market and why it could ultimately cause an increase Bitcoin Dominance of the BTC/USD market.
What happened: In his latest YouTube podcastCowen noted that despite the Federal Reserve keeping interest rates at 5.5% and announcing a reduction in quantitative tightening (QT) starting in June, he believes this will only prolong the process of Bitcoin dominance to reach its peak.
He predicts dominance will eventually reach 60%, potentially by late summer or September. Currently, CoinMarketCap data highlights Bitcoin’s dominance at 52.5%.
Drawing parallels with the 2019 market cycle, Cowen pointed out that the current decline in Bitcoin dominance, which has sparked excitement among altcoin enthusiasts, resembles the period before the first rate cut in July 2019 .
He expects a similar scenario, with a brief altcoin rally followed by a final capitulation. Cowen adds that once dominance scales, it does so quickly, stating: “I think you’re probably going to see dominance, excluding stablecoins, find some form of higher low from which it s ‘press.
Cowen also discussed the sticky nature of inflation and its implications for the crypto market. He noted that if inflation persists, the Fed could be forced to keep rates higher for longer, leading to a late change in monetary policy.
Read also: Why Bitcoin Could Fall Another 20%: 10x Research
Why “Altcoins are oscillators”
Cowen also addressed the altcoin’s recent price surge, attributing it to investors using the news of the QT cut as a catalyst for a short-term rally. However, he believes this move is unsustainable and will likely result in a lower low before support is broken, leading to a fall towards the lows of the range.
He points out that “altcoins are oscillators at best,” which suggests that individual altcoins and the collective altcoin market are doomed to bleed against Bitcoin over a long enough period of time.
He forecasts one final exit pump for altcoins before a significant decline and advises investors to keep an open mind and prepare for potential volatility in the coming months.
The future trajectory
Looking ahead, Cowen expects Bitcoin dominance to continue its upward trajectory, with altcoins potentially seeing a 40% decline to reach the lows of the range. He predicts that the true “alternate season” won’t occur until the year after the halving, when dominance will typically decline after a three-year uptrend.
Regarding Bitcoin’s near-term outlook, Cowen highlighted that the cryptocurrency has lost support at the 100-day moving average, increasing the likelihood of a fall below the bull market support band in the months future.
And after: The influence of Bitcoin as an institutional asset class should be explored in depth in the next The future of digital assets event on November 19.
This content was partially produced using AI tools and was reviewed and published by Benzinga editors.
Image created using artificial intelligence with Midjourney.