A widely followed crypto analyst is predicting a meltdown for altcoins as one key metric suggests they have much further to drop.
In a new video update, crypto strategist Benjamin Cowen tells his 780,000 subscribers that an altcoin reckoning is on the horizon because the Bitcoin (BTC) dominance chart (BTC.D) still remains low.
The BTC Dominance chart tracks how much of the total crypto market capitalization belongs to Bitcoin. According to Cowen, the altcoin market remains a falling knife until BTC.D resolves to the upside.
“One of the things that [has] kept me really bearish on the altcoin market is of course the Bitcoin dominance. [It is] still very low and now at 42%, if you exclude stablecoins, it’s something like 48%…
Even though the dominance is still low, this is what’s kept me from buying altcoins this year. This is what has kept me from saying in 2022 ‘Look guys, I know you like the shiny altcoin objects in a bull market, but in a bear market, they are not your friends, don’t marry an altcoin.’
I recognize the dominance is still low, but I will say this metric is really what’s kept me in large part from buying altcoins and so far it’s worked out pretty well.”
With altcoins dominating the crypto markets, it suggests that traders are still speculating on digital assets other than Bitcoin.
Using smart contract platform Cardano (ADA) as an example of a prominent altcoin that could dip, Cowen notes the crypto asset’s massive price drop over the last year.
“The idiosyncratic risk of a single altcoin is simply not worth it, and ADA is now down 92%, but during the last bear market, ADA dropped 98%, almost 99% from the all-time high. It gives you an idea of how bad it got
If [ADA} were to go down 98.77%, it would go back down to $0.04.”
Bitcoin is changing hands for $16,524 at time of writing while ADA is moving for $0.245.
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