A closely followed crypto analyst and a trader Benjamin Cowen believes that Bitcoin’s historical performance points that at the moment, investing in altcoins is risky.
In the latest video, Benjamin Cowen informs his 729,000 youtube subscribers saying Bitcoin’s 2018 price movement suggests what impact would the altcoin market have if the flagship cryptocurrency continues to dip. To prove his point he quotes that
“We need to look at what has happened in the past and say if we put in a lower low, what happens? The altcoin market against the Bitcoin market changes. The best way to understand that is by looking at Bitcoin dominance [the ratio between the market cap of Bitcoin to the rest of the cryptocurrency markets].
The dominance right now is at the exact same level it was at in June of 2018, the exact same level and then the dominance shot up… What happened in June of 2018? That’s where Bitcoin puts in a lower low.”
According to the trader, Cowen, if Bitcoin Price manages to make lower lows then the altcoins valuation will change fundamentally. Hence, Benjamin says
“We don’t know yet if Bitcoin’s gonna put in a lower low but…… If Bitcoin puts in a lower low, the structure of the market changes completely. The reason is that the bulls can no longer hold on to the thesis that it is still a bull market because we’re putting in higher lows…..”
Looking at Bitcoin’s parallel price action of now and in 2018, as per Benjamin, this parallel price action lays out the positive outlook for Bitcoin and the altcoins market. He claims
“If we, in fact, end up putting in a lower low, then we have to go back down and test the bottom of this range just like we had to go back down and test the bottom of the $6k range back in 2018…….
Over here, the range that we kept going down to was $6k, but over here, you could argue that it’s closer to $30k, basically that same range more or less. You have $6k and $30k. The floor from here to here has gone up 5x, but the structure is still somewhat similar.”