Author:
Crypto, Distilled
Translated by: Felix, PANews
What is the next trend in the crypto market? The market is like a battlefield. The gap between the bear market and the bull market will only grow larger. Cryptocurrency analyst Benjamin Cowen predicts the future of the crypto market, believing that BTC and ETH will strengthen their dominance, and the trend of altcoins against Bitcoin (ALT/BTC) will be similar to that of the summer of 2019.
Key points:
BTC’s dominance is on the rise overall
The dominance of blue-chip stocks will further increase
ETH/BNB/TON are rising against the trend
The impact of the ETH spot ETF may be overblown
Once the market’s attention bottoms out, the altcoins will follow
Impact of ETF on Bitcoin:
Many investors are puzzled by the increase in ETF holdings, but the trend of Bitcoin is not good. Ben believes that the size of the crypto market is much larger than the flow of ETFs. There are also many overlooked sources of liquidity, such as whale players.
Why so obsessed with ETFs?
The enthusiasm for ETFs is largely due to personal bias. Ironically, supporters of the phrase “no key, no coin, key and coin are one” are also promoting ETFs. This inconsistency reveals a key force at work: the theory of folly (note: the theory of folly refers to the price of an asset being determined by people’s expectations).
Outlook for altcoins: What are the future trends?
The altcoin market is at a critical support level. It is expected that the market will break down, which may trigger further declines.
Ben’s views are based on the fact that most ALT/BTC tend to be volatile.
When will ALT/BTC bottom out?
Once the social risk index reaches a lower low point, ALT/BTC may bottom out. The current market situation is similar to that before the summer of 2019 when the Fed cut interest rates. Social interest rebounded before halving in both 2019 and 2024, but then declined again.
Advance Decline Indicator (ADI):
One way to visualize altcoin capitalization is to use ADI. ADI is an index based on the ratio of the number of rising tokens to the number of falling tokens each day, reflecting the overall market trend. Recent market conditions indicate that there are more falling altcoins than rising ones. Do not go against the trend.
BTC – Calm in the Storm
Although Ben is bearish on most altcoins, BTC has some resilience. Ben also emphasized the relative strength of ETH, BNB, and UNI.
Ben did not explain in detail why ETH and UNI are strong. A reasonable explanation may be the resilience of DeFi. In a generally weak market, there are some strong signs.
Weak Total3
The Total3 index (the total market value of all cryptocurrencies other than BTC and ETH) is still below its 20W moving average.
This does not mean that altcoins have vanished, but selective investment is crucial.
Small Cap vs. Large Cap:
Another interesting point is OTHER – Total3 / OTHERs. This is a comparison of low-cap altcoins to high-cap altcoins.
Lately, the returns of higher-cap altcoins have been significantly better than other tokens. Ben expects that, similar to mid-2022, low-cap altcoins may experience further declines.
Will Bitcoin’s dominance soon peak?
BTC’s dominance has not yet peaked. This is because Bitcoin has not broken its 20W moving average. Bitcoin remains stable between $60,000 and $70,000, while other tokens are declining.
BTC’s dominance is generally on the rise:
A notable feature of this cycle is that altcoins have not experienced a general rise. The result is that BTC’s dominance is generally on the rise.
Blue-chip tokens dominate:
This trend also extends to the dominance of blue-chip tokens: the dominance of BTC and ETH is on the rise.
It is expected that this figure will approach 73%, and it may even reach the upper limit of 80%. The recent market data is about 73%, reaching the upper limit of the range.
BTC dominance (excluding ETH):
The recent decline in BTC dominance is entirely due to the speculation of the ETH spot ETF. Apart from ETH, BTC’s dominance remains strong.
ETH/BTC outlook:
The speculation of the spot ETF may temporarily boost ETH. However, it is expected that the long-term outlook for ETH/BTC will be downward. This is because the US monetary policy has not changed, despite Bitcoin’s strong performance in difficult times.
When will ETH/BTC bottom out?
ETH/BTC may bottom out after the Fed’s interest rate cuts or quantitative tightening, but these events have not yet occurred.
In the context of restrictive monetary policy, the performance of BTC may surpass that of ETH.
Conditions for failed predictions?
Ben remains open to the possibility of ETH’s strong performance. Especially since ETH/BTC has remained above the bull market range in July. It is worth noting that Ben did not predict the surge in ETH prices at the end of May. Therefore, this forecast may be wrong again.
It is worth noting that in the cryptocurrency field, pessimistic views are often easier to rationalize than optimistic ones. However, it is important not to forget the irrational nature of the market. Strong reflexivity can trigger huge price fluctuations in an instant.
PANews Note: Reflexivity refers to rising prices attracting buyers, who then drive up prices further, until the process becomes unsustainable. The same process can also be reversed, leading to a price collapse.
Prediction of Future Trends in the Cryptocurrency Market BTC and ETH to Strengthen Their Dominant Positions