In a recent Podcast with Aaron from Altcoin Daily, Benjamin Cowen, known for his quantitative market analysis, highlights intriguing historical patterns in the crypto market.
What Happened In The Previous Cycle?
Analyzing the market trends, Cowen suggests that the current Bitcoin cycle mirrors past patterns from 2013, 2017, and late 2021. He believes that the cyclical nature of Bitcoin’s performance is repeating, with similar trends observed in these previous periods. This perspective indicates that while the market feels different, the underlying patterns are consistent with past cycles.
Macro Economic Factors
Cowen emphasizes the importance of macroeconomic factors on Bitcoin’s future. Key to this are the US unemployment rate and inflation. The Federal Reserve faces the dual challenge of reducing inflation to its 2% target while managing unemployment. Currently, inflation stands at 2.92%, showing a gradual decline. Cowen anticipates a rate cut in September, possibly by 25 basis points, reflecting the Fed’s attempt to avoid a repeat of the 1970s inflation surge. He also notes that an extended period of high rates could lead to deflation, as seen in the 1940s.
Bitcoin to Peak in Q4
Moving on, Cowen analyzed Bitcoin’s four-year cycle, where historically, Bitcoin peaks in Q4 of the post-halving year. 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. He further noted that Bitcoin’s current pattern, including a possible peak and decline, matches past cycles but with minor delays because of changing economic conditions.
However, on the flip side, the analyst doesn’t believe Bitcoin’s 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.
BTC Predictions for 2025
Looking ahead to 2025, Cowen suggests that Bitcoin could face a challenging period over the next six to nine months, similar to 2019, before potentially entering a bullish phase. He anticipates a shift in dominance from Bitcoin to altcoins as monetary policy loosens. Cowen believes that while Bitcoin has performed well, with a notable 350% increase from its lows, altcoins may outperform Bitcoin in the coming year.
Ethereum and Altcoin Market
After Bitcoin, Cowen discusses Ethereum’s underperformance compared to Bitcoin, noting historical patterns where Ethereum has experienced significant rebounds after periods of underperformance. He predicts that Ethereum and other altcoins might see a resurgence in 2025 after a period of low performance.
Conclusion
Overall, Cowen’s analysis suggests that while Bitcoin’s dominance may continue in the short term, a shift towards altcoins is likely as we move into 2025. He emphasizes that the current market dynamics, while seemingly unique, are reflective of historical trends.
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