Popular crypto analyst Benjamin Cowen warns that a significant fake uptrend could occur after Bitcoin (BTC) surpasses the $30,000 level.
Cowen thinks that Bitcoin may reach a higher price in the short term, but then a pullback may occur. According to the analyst, the reason for the recent jump in Bitcoin is not new money entering the markets. The main reason for the rise is the shift of liquidity from altcoins to BTC, which is a safer bet:
“Whatever the direction of BTC/USD, Bitcoin dominance will likely go higher. At some point this year, I think, we will reach a stage where there is not enough liquidity in the altcoin market to sustain Bitcoin’s rise, and we will experience secondary fear, just like we did last cycle and the cycle before that.
Ultimately, what I’m trying to say is, I think altcoins… it’s still not worth the risk until there’s a clearer bottom like it has been for the past year and a half, because Bitcoin is sucking up all that excess liquidity from the rest of the market.”
Cowen also drew attention to historical data. According to these data, Bitcoin is pulling liquidity from the altcoin market before forming a final correction for the next bull run.
“Most of what we’re seeing is liquidity moving from the altcoin market to Bitcoin. One of the things I said earlier is that in the pre-halving years, there is the idea that liquidity flows back into Bitcoin from the altcoin market. And it is difficult to know exactly at what point the liquidity from the altcoin market will not be enough to push the Bitcoin/USD price up.”
You can follow the current price action here.