Broadly adopted crypto analyst Benjamin Cowen is warning that Bitcoin (BTC) might see a major worth drop earlier than subsequent 12 months’s halving occasion in April 2024.
In a brand new interview with Scott Melker, Cowen says Bitcoin has traditionally collapsed by 50% within the lead-up to a halving occasion.
Whlie the analyst doesn’t particularly predict such a collapse, a 50% drop from Bitcoin’s final excessive would place it close to $15,000.
“Look, final cycle, what we all the time see, everybody talks in regards to the Bitcoin halving. I’ve seen this for the final a number of cycles. Everybody talks about it and what usually occurs is Bitcoin halves [in price] earlier than the halving after which persons are like, ‘Oh, properly, that’s what the halving meant.’
Final cycle, the drop into the pandemic, we nonetheless dropped 50% even earlier than that occurred. That was nonetheless a 50% drop. And this drop began in the summertime. Go to the cycle earlier than that. We had a drop beginning in the summertime and it dropped 50% earlier than the actual bull market started. So I nonetheless have a look at it and a few individuals say, ‘Properly, it’s not dropping right now.’ How do we all know it’s not? How do we all know that this isn’t only a decrease excessive and that that is nonetheless a part of the 50% drop? It may very well be.”
Cowen says one of many the explanation why he believes Bitcoin might make a significant transfer to the draw back is the drying up of liquidity in crypto and most threat asset markets.
“And that’s my concern for Bitcoin, is that liquidity is leaving the altcoin market. The buying energy of those altcoins are taking place and in some unspecified time in the future, I believe that impacts Bitcoin. Take a look at the overall market cap. If there have been quite a lot of new cash coming into the area, why is the overall market cap the identical because it was again in February and the identical because it was again in August 2022?
There’s probably not quite a lot of new cash coming into the area it’s principally simply cash shuffling round from the altcoin market to Bitcoin and one of many fundamental drivers of it’s Ethereum. Take a look at have a look at what’s occurring with the ETH/Bitcoin pair. It’s collapsing proper now. I stated earlier than, this simply merely appears to be like like a distribution part.”
Bitcoin is buying and selling for $28,527 at time of writing, whereas the ETH/BTC pair is buying and selling for 0.05532 BTC ($1,578).
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