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Analyst Forecasts Potential 50% Decline in Bitcoin
Benjamin Cowen, a cryptocurrency analyst, suggests that Bitcoin may experience a significant price reduction before its next halving event in April 2024. Cowen cites historical data showing a price reduction by roughly half before the event, a pattern seen in the last cycle. He questions whether the current market is experiencing a “lower high” and identifies waning liquidity in crypto and risk asset markets as a reason for potential downside price movement. He also concerns the diminishing buying power of alternative cryptocurrencies (altcoins) and the inflow of new money into the crypto space. Cowen argues this phenomenon appears to be a distribution phase, particularly highlighting the declining performance of the ETH/Bitcoin trading pair.
On October 9, Cowen warned that the crypto market is entering a tough period, with Bitcoin’s share of the total crypto market capitalization climbing due to investors becoming more cautious. Despite potential price drops, Bitcoin’s market dominance tends to grow, as altcoins face steeper price drops. This is considered the most difficult part of the market cycle, as other digital currencies face even steeper drops in value.
(With inputs from Shikha Singh)
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