- Analysts predict a crucial quarter for cryptocurrencies due to Fed rate cuts and altcoin performance vs. Bitcoin.
- Bitcoin’s recent price dip, according to CoinGecko, indicates market volatility amid economic uncertainty.
Renowned cryptocurrency strategist Benjamin Cowen provides an in-depth examination of the variables that may determine the course of the market in the coming quarter. With interest rates varying and a nervous investor base, Cowen’s observations offer a crucial perspective on the possibility of a market correction.
The Tightrope Walk of the FedÂ
Cowen, a well-known analyst of cryptocurrencies with a sizable YouTube following, emphasizes the potential impact of Federal Reserve policy on the digital asset market. His main worry is that rates could be lowered, which would normally bring liquidity to the markets but could also be an indication of economic hardship.
Because the Fed’s decisions are so imminent, the cryptocurrency market is in a dangerous position and susceptible to changes in monetary policy, in line with what ETHNews previously disclosed.
The success of altcoins in relation to Bitcoin (BTC) is a major area of attention for Cowen’s analysis, since he suggests that this could be an early signal of market mood. According to Cowen, the alt/BTC combinations represent the trust of retail investors as a whole.
A collapse in these pairs could herald the beginning of a more significant market correction due to recessionary pressures and a decline in consumer confidence as a result of the Fed’s aggressive strategies.
TOTAL3: A Measure of Market Health
Cowen uses TOTAL3, a statistic that tracks the market capitalization of cryptocurrencies while omitting big players like Bitcoin and Ethereum, to further hone his analysis.
As of the time of his research, TOTAL3 is valued at $753.10 billion. Cowen keeps a careful eye on this number for indications of changes in the altcoin market and investor mood.
According to recent data from CoinGecko, the price of Bitcoin has fallen, falling to $67,839.32 in just the last day, a decrease of 4.25%.
This decrease is indicative of the market’s volatility and mounting fears about the Fed’s upcoming steps, despite a favorable trend over the past week.
According to Cowen, Bitcoin’s dominance (BTC.D) may increase if rate cuts are postponed past the expectations of the market and altcoins lose value more quickly. He added:
“I know [the probability of] rate cuts is being pushed out until July now, but we’ll see if they make it that long.”
And also, for a more in-depth analysis of this development, see the video that follows.
Looking Ahead: An Uncertain Summer
An important consideration as the Bitcoin market makes its way through these rough seas is when rate cuts will occur. In the event that the Federal Reserve postpones these reductions until July, the repercussions may prolong the hegemony of Bitcoin while driving down other cryptocurrencies.
Cowen warns investors about the possibility of ongoing cryptocurrency volatility in the face of delayed monetary easing by referencing past trends.