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Bitcoin's Dominance is Huge, But This Analyst Believes There's a Catch

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By Dewey Olson - - 5 Mins Read
A person draws a spaceship on a blackboard; Bitcoin
Photo | Shutterstock
A person draws a spaceship on a blackboard; Bitcoin
Photo | Shutterstock


Bitcoin's dominance in the cryptocurrency market is a subject of growing interest and debate. Benjamin Cowen, the founder of Into The Cryptoverse (ITC), recently shared his insights during a discussion on the Altcoin Daily YouTube crypto channel.


Cowen believes that Bitcoin's dominance is set to increase further, and he bases his prediction on the potential for interest rates to decline, which could directly impact the Altcoin market capitalization.

Altcoins Face Uncertain Times as BTC Dominance Grows

Cowen's outlook centers on the relationship between Bitcoin dominance and interest rates. He suggests that a potential drop in interest rates could directly affect the market capitalization of altcoins.


Cowen introduced the 'Total 3' indicator to support his claims, a metric used to gauge the combined market value of all cryptocurrencies except Bitcoin and Ethereum.


Using this indicator, Cowen showed that the altcoin market is currently drawing in net liquidity, which he defines as the balance sheet of major central banks, including the Federal Reserve (the Fed), the European Central Bank (ECB), and central banks in countries like Canada, the UK, China, Japan, and others.


BTC Dominance chart
BTC Dominance Chart | TradingView


By overlaying the net liquidity metric on the Total 3 indicator, Cowen revealed a declining trend in net liquidity, suggesting that the altcoin market might follow a similar path.


According to Cowen's analysis, there could still be room for the altcoin market to decrease in value, although it's not certain. He believes that the fate of the altcoin market is closely tied to the strength of Bitcoin.


If Bitcoin experiences a significant rally, it's likely to positively impact the altcoin market. Cowen also noted that, during this period, specific altcoins may occasionally experience huge price surges. He explained that these surges result from capital rotation within the cryptocurrency space rather than the influx of new funds into the market.

Monitoring Altcoins for Potential Breakouts

Looking ahead, Cowen stressed the importance of closely monitoring the behavior of altcoins, especially those that have recently rallied. While many altcoins have seen value increases, these gains have often been linked to Bitcoin's performance.


Cowen advises investors to pay close attention to these altcoins and watch for any signs of breakouts. He believes that a confirmed breakout above the current resistance levels could be the trigger for a substantial rally in the altcoin market.


The analysis provided by Benjamin Cowen raises essential questions about the dynamics between Bitcoin and altcoins. As BTC dominance continues to grow, altcoin investors may need to carefully consider their strategies and the factors influencing the cryptocurrency market.


Altcoin Dominance Chart Shows Signs of Volatility

It has become evident that the landscape is constantly evolving. The cryptocurrency market is not just about Bitcoin; it comprises numerous other digital assets. These altcoins represent a wide range of projects with unique features and potential.


To understand the dynamics of Bitcoin's dominance and its impact on altcoins, keeping an eye on the altcoin dominance chart is essential. This chart provides a quick peek at how the altcoin market performs relative to Bitcoin.


When Bitcoin's dominance is high, it means that Bitcoin is holding a significant share of the cryptocurrency market. Conversely, when altcoin dominance rises, it indicates that altcoins are gaining ground.


Altcoins in recent years have gained substantial attention, and their dominance has fluctuated. Various factors influence this fluctuation, including market sentiment, technological developments, and macroeconomic conditions.


As we've seen in Cowen's analysis, the state of global financial markets, such as interest rates and central bank policies, can also greatly impact the altcoin market.


Understanding these nuances is important because it allows us to make informed decisions in a market that can be highly volatile and unpredictable.


As Bitcoin's dominance continues to play a pivotal role in the cryptocurrency market, staying informed about the altcoin dominance chart and the broader market dynamics is more important than ever.


Watch Cowen's analysis here...