Altcoins Can See 40% Drop Against BTC Pairs Over The Next Few Months, Says Analyst

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As a researcher with experience in the cryptocurrency market, I find the current bearish trend quite concerning. The recent outflows from Bitcoin ETFs and the sharp correction in altcoins suggest that investors are becoming increasingly risk-averse. The potential correlation between altcoin-to-Bitcoin pairs and impending rate cuts, as suggested by Benjamin Cowen, adds to my concerns.

The cryptocurrency market as a whole is experiencing a bearish trend just ahead of the FOMC meeting, resulting in daily outflows of approximately $162 million from Bitcoin ETFs. If inflation rates continue to rise, it may eliminate the possibility of Fed interest rate reductions this year. In the past 24 hours, Bitcoin’s price has dropped by around 5%, falling below $60,000, while altcoins are witnessing even more significant corrections.

Altcoins To See Even Deeper Corrections

Crypto expert Benjamin Cowen has offered intriguing insights, suggesting a possible connection between altcoin-to-Bitcoin (ALT/BTC) ratios and upcoming interest rate reductions. By referencing past trends, Cowen highlighted that ALT/BTC pairs showed signs of capitulation preceding rate cuts in the previous cycle. He hypothesized that this pattern could reoccur, potentially leading to a further 40% decrease in ALT/BTC ratios over the next several months.

Last cycle, we saw #ALT /#BTC pairs capitulate just before rate cuts.
Could it be that this situation is similar to past occurrences, implying a potential 40% decline in the value of ALT and BTC against USD within the upcoming months?
Short-term countertrends do not invalidate this view.
— Benjamin Cowen (@intocryptoverse) April 30, 2024

As an analyst, I’d interpret Cowen’s stance as follows: In spite of temporary reversals, Cowen remains firm in his view, emphasizing the persistent challenges faced by altcoins amidst dwindling social media buzz. He draws a comparison to the situation in 2019, where social interest waned before rate cuts led to a significant low for ALT/BTC pairs. Investors’ apathy mirrors this previous scenario.

May Could Be Tough for Bitcoin and Crypto

The price of Bitcoin has continued to decline, currently sitting at around $59,500 as we speak. April has proven to be a disappointing month for Bitcoin following the FTX crash in November 2022. Analysts predict that if Bitcoin falls below its 100-day moving average of $58,000, it could potentially slide further down to $52,000.

In early February, the previous encounter between Bitcoin’s price and the 100-day moving average occurred when the Relative Strength Index (RSI) touched 36. This occurrence in late January led to a significant price recovery for Bitcoin.

Currently, Bitcoin’s price has returned to this point. But be mindful: If Bitcoin fails to hold above its 100-day moving average in the coming days, a potential slide towards the 200-day moving average may ensue.

— Ali (@ali_charts) April 30, 2024

Market analyst Patric H. predicts a tumultuous emotional journey for Bitcoin and altcoin investors in May. He proposes that within the next 2-6 weeks, there could be a final wave of selling before a potential surge in prices. Additionally, he noted that the current market sentiment is overly optimistic based on the Fear and Greed Index, which leans heavily towards “Greed.”

As an analyst, I’ve noticed that Patric brought up a concern: the Bitcoin market is experiencing a loss of momentum due to persistent outflows from Bitcoin Exchange-Traded Funds (ETFs). Furthermore, the lackluster debut of the Hong Kong Bitcoin ETF, which saw only $11 million in trading volume versus the anticipated $300 million, has not met investor expectations.

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2024-05-01 10:34