The post Bitcoin Not in ‘Mania Phase’: Benjamin Cowen Says Price May Drop to $38k Levels; Cooling and Recovery Periods Revealed appeared first on Coinpedia Fintech News
Popular analyst and Founder of Into The Cryptoverse, Benjamin Cowen, joined David Lin for a discussion about Bitcoin and its currency cycle. Cowen believes Bitcoin dominance might peak when the Fed cuts rates and shifts from quantitative tightening to easing.
Historically, Bitcoin’s current behavior mirrors what happened in 2019, where it diverged from the NASDAQ after the Federal Reserve cut rates. This divergence, he said is similar to Bitcoin’s previous behavior in 2019, where it weakened before the equity markets.
Cowen also said that Bitcoin’s peak in late 2021 led to a major drop in 2022. The initial drop in Bitcoin was due to the market overheating, fueled by rapid speculation. He believes the current situation resembles the 2019 cycle more than the 2021 cycle. In 2021, Bitcoin’s social interest was much higher, but now it’s lower, similar to the situation in 2019. This suggests that the market is not in a mania phase like it was in 2021. Currently, Bitcoin’s rise is partly due to increased Bitcoin dominance as people convert their altcoins into Bitcoin.
The analyst doesn’t believe Bitcoin dominance will return to 100% of the crypto market. Instead, he thinks it might peak around 60% to 70% due to the presence of other cryptocurrencies like Ethereum.
What Happened In The Previous Cycle?
Cowen explained that in the last cycle, Bitcoin dominance reached its mid-cycle top when it crossed the 0.5 Fibonacci retracement level. A similar pattern happened this cycle, hinting that Bitcoin might be at a mid-cycle top now. Historically, after hitting this level, Bitcoin often experiences a downtrend, which lasted about six months in 2019.
He also pointed out that the market could face either a “soft landing” like in 2019 or a “hard landing” similar to 2020. He expects Bitcoin to cool off for several months, potentially through the end of the year, and then possibly recover in 2025.
Regarding Bitcoin’s price floor, he’s cautious about predicting it. While some suggest $50,000 is a new floor, he argues that predicting exact floors or tops is unreliable. He also added that Bitcoin might drop to around $38,000 or lower, similar to past cycles.
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