Dr. Benjamin Cowen, a renowned crypto analyst with a rich background in Engineering, Computational Mathematics, and Programming, recently provided insights into Bitcoin’s current market behavior. With a substantial following of over 785K on his YouTube channel, Cowen delved into the patterns that Bitcoin seems to follow every four years, linking it to the behavior of the S&P 500 stock index.
Cowen introduced the concept of the “secondary scare” in the crypto world, drawing parallels with the S&P 500’s tendency to experience corrections in August or September of its US pre-election year. Observing the patterns of 2023, Cowen pointed out that the S&P 500 is currently undergoing the anticipated correction, having declined by slightly over 5% since the beginning of August.
Drawing from historical data, Cowen highlighted that during past “secondary scares,” Bitcoin has witnessed significant drops ranging from 39% to a staggering 83%. He provided a breakdown of these occurrences:
In all these instances, the S&P 500 experienced a drop in the third quarter of the pre-election year, which was subsequently followed by a Bitcoin downtrend.
Based on the historical precedent, Cowen presented three potential scenarios for Bitcoin’s decline:
On the same, Cowen highlighted that XRP had lost all the gains it had made after Judge Analisa Torres ruled it as a non-security. Cowen emphasized that events like the SEC vs. Ripple case outcome are not lasting drivers for price hikes. He believes that the initial excitement surrounding such events is transient, and the cryptocurrency will eventually revert to its usual trajectory.
Cowen posits that the value of altcoins is more influenced by the presence of excess liquidity in the market than by individual events, such as court case outcomes. Excess liquidity indicates a surplus of investable funds, which, according to Cowen, could potentially push altcoin prices higher.
#XRP has completely retraced the entirety of the move that came after the SEC vs. Ripple ruling.
As I have said, these narratives do not sustainably impact the price.
The price of altcoins are more so a function of excess liquidity than they are about who wins a court case. pic.twitter.com/8NWZk4r7JR
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