In a recent podcast with Aaron from Altcoin Daily, Benjamin Cowen, known for his quantitative market analysis, sheds light on fascinating historical patterns in the crypto market.
What happened in the previous cycle?
Cowen analyzes market trends and concludes that the current Bitcoin cycle reflects previous patterns from 2013, 2017, and late 2021. He believes that the cyclical nature of Bitcoin performance is repeating itself and that similar trends were seen in previous periods. This perspective shows that while the market feels different, the underlying patterns are consistent with previous cycles.
Macroeconomic factors
Cowen stresses the importance of macroeconomic factors for 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 keeping unemployment under control. Currently, inflation is at 2.92% and showing a gradual decline. Cowen expects a rate cut in September, possibly by 25 basis points, reflecting the Fed’s attempt to avoid a repeat of the inflation spike of the 1970s. He also points out that a prolonged period of high interest rates could lead to deflation, as seen in the 1940s.
Bitcoin hits fourth quarter high
Cowen then analyzed Bitcoin’s four-year cycle, which historically sees Bitcoin peak in the fourth quarter of the year following the halving. He also noted that the market could experience either a “soft landing” like 2019 or a “hard landing” like 2020. He expects Bitcoin to cool off for several months, possibly until the end of the year, and then potentially recover in 2025. He also noted that Bitcoin’s current pattern, including a possible peak and decline, is consistent with previous cycles, but with slight delays due to changing economic conditions.
On the other hand, however, the analyst does not believe that Bitcoin will regain 100% of its dominance in the crypto market. Instead, he believes that it could reach a high of 60-70% due to the presence of other cryptocurrencies like Ethereum.
BTC predictions for 2025
Looking ahead to 2025, Cowen suspects that Bitcoin could go through a rough patch over the next six to nine months, similar to 2019, before potentially entering an uptrend. He expects a shift in dominance from Bitcoin to altcoins as monetary policy eases. Cowen believes that while Bitcoin has performed well, posting a notable 350% increase from its lows, altcoins could outperform Bitcoin in the coming year.
Ethereum and Altcoin Market
After Bitcoin, Cowen discusses Ethereum’s underperformance relative to Bitcoin, noting historical patterns where Ethereum has experienced significant recoveries after periods of underperformance. He predicts that Ethereum and other altcoins could see a rebound in 2025 after a period of low performance.
Diploma
Overall, Cowen’s analysis suggests that while Bitcoin’s dominance may continue in the short term, a shift toward altcoins is likely in 2025. He emphasizes that while the current market dynamics seem unique, they reflect historical trends.
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