A widely followed crypto analyst is issuing a warning, saying that the rest of 2024 looks less than ideal for altcoins.

In a new video update, crypto strategist Benjamin Cowen tells his 813,000 YouTube subscribers that based on historical patterns, altcoins appear set to plummet near the end of the year and capitulate against Bitcoin (BTC).

Cowen says the capitulation also lines up with the beginning of a new interest rate-cutting cycle.

“If you connect the dots from the last cycle, 2018, 2019 to 2020, you can see that it basically tagged this trend line three times and then the third tag of the trend line ended up being the bottom.

We know that this interest rate cycle, this business cycle, has taken a little bit longer and if you connect the dots again – one, two and three – the third tag of the trend line might actually occur by the end of the year and coincidentally if you look at this trend line where you connect the dots, it hits 0.25 in Q4 which is exactly what I’ve said could be the ultimate outcome: alt/Bitcoin pairs capitulating before the end of the year.

So I think there is a case to be made that alt/Bitcoin pairs will simply get rejected at 0.4, they could still wick a little bit above it, but I ultimately think they will get rejected and they will come back down to the range lows before the end of the year.”

According to Cowen, altcoins will also bleed out against the top crypto asset by market cap due to low net global liquidity, which he argues is a big driver for digital assets.

“One of the things that you have to consider is what’s causing this to go down and arguably one of the main things is net liquidity. So if you look at the global net liquidity approximation, you will see that it has in fact been putting in lower highs and lower lows for a while and actually if you overlay this chart with alt/Bitcoin pairs, you can actually pretty clearly see that alt/Bitcoin pairs broke down to the fake out right at the same time net liquidity was having a fake breakdown.”

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The overall bearish sentiment for Cardano (ADA) continues to rise as analysts now foresee a massive 33% price crash for the altcoin. This pessimistic projection comes as ADA struggles to gain traction in the market, with its value remaining stagnant or steadily dropping to lower levels. 

Cardano (ADA) Crash Incoming

Compared to other prominent altcoins in the crypto market, Cardano has performed poorly, struggling with price declines and sluggish growth. Consequently, a crypto analyst, identified as ‘Financialfreedomgoals’ on TradingView, predicted that cryptocurrency is likely to experience more than a 30% crash to new lows. 

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The analyst notes the broader negative state of the current crypto market, highlighting that most altcoins are stuck in a “bearish rut.” He disclosed that rather than achieving new all-time highs, these coins have been setting fresh lows, underscoring the persistent downtrend and decreased confidence amongst investors. 

Cardano, in particular, has had its share of negative sentiment and volatility. The cryptocurrency has stayed unwaveringly below the Exponential Moving Average (EMA) 200 line, a key technical indicator traders often use to gauge long-term trends. Typically, when the price of a cryptocurrency stays below this line, it tends to signal a continuation of a bearish trend. 

Given the present bearish state of the market, the crypto analyst has dismissed the idea of an upcoming altcoin season, where the majority of cryptocurrencies excluding Bitcoin experience significant price gains. 

On the daily time frame, Cardano is trading below the EMA 200 line and the bearish trend line. Initially, a rising wedge pattern had formed on the cryptocurrency’s price chart, however instead of breaking out, Cardano saw a series of negative candlesticks alongside a bearish crossover on the Moving Average Convergence Divergence (MACD). 

This series of negative indicators suggests that bears may be tightening their grip on Cardano’s price. As such, the crypto analyst foresees the ADA continuing its descent to reach fresh lows at target areas: 0.2506 or 0.2197. These targets are calculated using the Fibonacci retracement ratios of 1.272 and 1.618. 

0.3815 Resistance Could Trigger Bullish Surge

Despite maintaining a largely bearish stance on Cardano’s price outlook, Financialfreedomgoals has hinted at a potential bullish turnaround. He has suggested that a price reversal for ADA could be possible if the price of the cryptocurrency manages to break above the key resistance at 0.3815 Fibonacci level. 

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Crypto analyst Sssebi shares an even greater bullish outlook for Cardano. He highlights that during the previous bull market, ADA’s value increased by more than 100X. As a result, the analyst believes that ADA will rally by at least 20X in this current market cycle, expressing even stronger confidence that the cryptocurrency will reach $5 soon. 

As of writing, the price of ADA is trading at $0.3576, reflecting a significant increase of 11.39% over the past week, according to CoinMarketCap. 

Featured image created with Dall.E, chart from Tradingview.com

The Bitcoin derivatives market has reached a notable milestone, as the estimated leverage ratio for the asset has surged to its highest level of the year, latest data from CryptoQuant shows.

This metric, which tracks the ratio of open interest to coin reserves on exchanges, signals increased leverage use among market participants. The growing trend suggests that investors are taking on more risk by “employing higher leverage,” which could significantly impact Bitcoin’s price.

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The Impact Of High Leverage On Bitcoin’s Market

The increase in Bitcoin’s estimated leverage ratio highlights the growing use of leverage among investors in the derivatives market. Leverage allows traders to borrow funds to increase their exposure to Bitcoin without needing to hold the full amount of capital upfront.

While this can amplify profits during periods of market upswings, it also increases the risk of significant losses if the market moves against the position.

A high leverage ratio can often be a double-edged sword for the crypto market. On the one hand, it may indicate that investors are increasingly confident in Bitcoin’s potential for an upward move, especially if the market sees a breakout.

On the other hand, if Bitcoin’s price continues to decline, it could lead to a wave of liquidations as overleveraged positions are forced to close, exacerbating the downward pressure.

This trend of rising leverage has drawn attention from various market analysts. CryptoQuant analyst EgyHash pointed out that the estimated leverage ratio reaching its highest point this year could lead to increased volatility in the market.

The higher the leverage, the more sensitive the market becomes to price swings, as even small moves can trigger liquidations and create cascading effects.

Analysts Weigh In On Bitcoin Future

Meanwhile, Bitcoin’s price continues to face challenges, particularly its inability to break above key resistance.

The cryptocurrency has struggled to maintain momentum, and despite the increased leverage in the market, Bitcoin has experienced a mere 0.2% increase over the past 24 hours and a 2.1% drop over the past week. As a result, the asset is now trading below $57,000, with a current price of $56,871.

While Bitcoin’s price remains under pressure, several prominent crypto analysts have shared their perspectives on what lies ahead for the cryptocurrency.

Among them is the analyst known as CryptoBullet, who recently compared Bitcoin’s current cycle to previous bull markets.

In a post on X, CryptoBullet highlighted the similarities between the present market and Bitcoin’s 2013 cycle, noting that the Stochastic Relative Strength Index (Stoch RSI) has shown patterns that mirror those seen during the 2013 rally.

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CryptoBullet’s analysis suggests that Bitcoin could enter the final phase of its current cycle, with the potential for a “Wave 5” price surge that could push the asset to new highs.

#Bitcoin 1M Big Picture

This cycle doesn’t look like the 2017 or 2021 cycle. IMO it’s more like 2013 and Stoch RSI confirms it 👇

This cycle Stoch RSI peaked in March and during this 6-Month Consolidation in Wave 4 the Stoch RSI went lower than in 2016-2017 or in H2 2020-2021… https://t.co/Ni9NHHKxis pic.twitter.com/nreQcpAIFP

— CryptoBullet (@CryptoBullet1) September 10, 2024

While the analyst acknowledged that this cycle differs from those of 2017 and 2021, the technical indicators point to the possibility of a higher high on Bitcoin’s price chart shortly.

Featured image created with DALL-E, Chart from TradingView