Analyst Predicts up to 40% Decline in Altcoins Against BTC Pairs in the Coming Months

In a recent downturn that has shaken the cryptocurrency market to its core, Bitcoin and altcoins are facing a tough moment under the heavy influence of bearish trends. Notably, a day before the crucial Federal Open Market Committee (FOMC) meeting, Bitcoin Exchange-Traded Funds (ETFs) witnessed a staggering $162 million in outflows, signaling investor apprehension about the short-term prospects of digital currencies.

The chilling effect of possible heightened inflation figures looms large over the cryptocurrency landscape, effectively diminishing hopes of Federal Reserve rate cuts within the year. In the last day alone, Bitcoin’s valuation plunged by 5%, falling below the $60,000 mark, while altcoins suffered even deeper corrections amid this bearish onslaught.

Benjamin Cowen, a seasoned crypto analyst, offered insights that highlight a seemingly ominous future for altcoins in comparison to Bitcoin. According to Cowen, a historical pattern suggests altcoin-to-Bitcoin (ALT/BTC) pairs are poised for a capitulation phase just before rate cuts, mirroring past cycles. This pattern could indicate a further 40% drop in ALT/BTC pairs in the forthcoming months, adding a layer of uncertainty for altcoin investors. Despite temporary countertrends that might suggest a rebound, Cowen’s analysis draws on the diminished social interest in cryptocurrencies as an indicator of investor sentiment, akin to trends observed back in 2019 before a pivotal rate cut by the Federal Reserve.

The prognosis for May is grim for both Bitcoin and the wider crypto market. As of the latest updates, Bitcoin’s price hovers around $59,500, marking April as its worst-performing month since the collapse of FTX in November 2022. Analysts foresee a potential slide in Bitcoin’s value to $52,000 if it breaches the $58,000 support level, aligning with its 100-day Exponential Moving Average (EMA).

Amidst these tumultuous conditions, investor sentiment, as measured by the Fear and Greed Index, has veered towards the “Greedy” side, suggesting an overzealous market disposition that could prelude a correction. According to market analyst Patric H., the coming weeks could be emotionally taxing for cryptocurrency enthusiasts, with a “final shake-out” period possibly setting the stage for a breakout.

Adding to the woes, the cryptocurrency market is witnessing a notable decline in momentum, as evidenced by significant outflows from Bitcoin ETFs. Coupled with the lukewarm debut of the Hong Kong ETF, which garnered a mere $11 million in trading volume against anticipated figures of $300 million, the discrepancy between investor expectations and reality is stark.

This current downturn is reminiscent of previous cycles where speculative fervor and excessive optimism have often preceded substantial market corrections. While the immediate future appears fraught with challenges, it’s crucial for investors to maintain a keen eye on market indicators, geopolitical events, and regulatory developments that could sway the crypto market in unexpected directions.

Market participants are now faced with the arduous task of navigating through this volatile storm with prudence and foresight. The unfolding dynamics of the FOMC meeting, inflation data, and global economic conditions will undoubtedly play a pivotal role in shaping the trajectory of Bitcoin and altcoins in the looming months. As the crypto market grapples with these uncertainties, a cautious approach, coupled with strategic planning, may hold the key to weathering the current downturn and capitalizing on potential opportunities that may arise from the ensuing market recalibration.