Widely followed crypto analyst Benjamin Cowen believes altcoins are not yet done trending down against Bitcoin (BTC).
In a new video, Cowen tells his 788,000 YouTube subscribers that the bearish trend that altcoins are witnessing in their Bitcoin pairs is a regular occurrence ahead of the halving.
“Remember, in pre-halving years what happens when Bitcoin pumps? It breaks altcoins off of their Bitcoin support levels so that when Bitcoin goes back down, those altcoins just simply have nowhere to hide. The altcoins just continue to get wrecked on their Bitcoin pairs and they go lower.”
The Bitcoin halving, which slashes BTC miners’ rewards in half, occurs every four years and the next one is slated for April 2024.
To illustrate the extent to which altcoins have depreciated against the flagship crypto asset, Cowen shows the performance of Cardano versus Bitcoin (ADA/BTC) over the past year.
“Look at the ADA/BTC trend here. It moves up, it then goes down and puts in a new low. It moves up and then goes down and puts in a new low. It moves up and then goes down and puts in a new low. Like 40% drops approximately. And it just keeps happening, it just keeps happening.
You must be aware of this trend. it’s a brutal trend.”
Cowen also explains why he believes that altcoins will continue to lose value against Bitcoin. The analyst says that crypto market participants will likely keep on shifting their capital away from altcoins in favor of BTC.
“The reason that we see these [Bitcoin] pumps in the pre-halving year is not because there’s a lot of new liquidity coming into the market. It’s just because a lot of people are converting their altcoins to Bitcoin.
For the first half of the year [before the halving year], there’s sufficient liquidity in the altcoin market to continue to lead to new yearly highs for Bitcoin/US dollar. But eventually, the altcoin market is bled dry.”