Benjamin Cowen Predicts Altcoins Will Continue Underperforming Bitcoin

Crypto analyst Benjamin Cowen expects altcoins to continue underperforming against Bitcoin, with the key altcoin-to-bitcoin market cap ratio set to fall further from its current 0.34 level toward 0.25.

Tracking the total altcoin market cap (excluding Ethereum) versus bitcoin’s, the ratio has been steadily declining over the past year and currently sits at around 0.34, according to Cowen. He noted that the next support level appears to be at 0.32, with a longer-term target of 0.25 in mind.

The chart also shows a descending triangle pattern, which bodes well for further downward momentum in the upcoming period.

"With QT continuing, it seems likely that the altcoin pairs against bitcoin will keep dropping. The chart shows the total altcoin market cap (excluding ETH) versus bitcoin's market cap. It's still holding up okay, with the next support at 0.32 and a longer-term target of 0.25," said the analyst.

Quantitative tightening (QT) seen favoring bitcoin over altcoins

The analyst explained that the trend could be linked to global quantitative tightening (QT), particularly by the U.S. Federal Reserve, as it pulls liquidity out of the markets.

Cowen has previously stated that market liquidity is a major driver of crypto performance. When liquidity shrinks, investors tend to move away from riskier assets like small-cap altcoins and prefer bitcoin, which is viewed as more stable and less volatile.

This preference for bitcoin is also evident in its dominance, which is approaching the 66% level, signaling further weakness in the broader market.

At the time of writing, bitcoin dominance stands at 65.14%, having dropped slightly by 0.3% over the past day. However, over the past month, it has risen by 2.55%, adding to its year-to-date gains of 12.1%.

Historically, such rapid increases in bitcoin dominance have occurred during bear markets or macroeconomic tightening periods. In previous cycles, bitcoin dominance usually rose sharply before altcoins finally found a bottom, setting the stage for a rebound.

However, despite Cowen’s bearish outlook, other analysts remain optimistic about the performance of altcoins during this cycle.

Notably, bitcoin broke the $99K level today following a 3% surge. Altcoins are gradually capitalizing on bitcoin momentum.