This is the worst case scenario for Bitcoin and crypto markets, according to analyst Benjamin Cowen
Analyst Benjamin Cowen is detailing a potential worst-case scenario for Bitcoin and the crypto markets in general.
In a new video for his 765,000 YouTube subscribers, Cowen looks at the bursting of the dot-com bubble, for clues as to where that could end up with the digital asset market. Looking at the total market capitalization of all crypto assets, the analyst says that the current pullback could continue down to around $760 billion.
At the time, Cowen said that a 60% bounce would be proportional to the bounce seen in the dot-com era, bringing the total market cap back to $1 trillion.
If and when that happens, Cowen says the markets will land in a very tough place.
Ads If we get 60% off the future bottom - let's say it happens by the end of the year - a lot of people will assume, to some extent, I would say, there
But we should always keep in mind that there are no certainties regarding investing there is always a risk that you are taking no matter how confident you are that something will work out.
And if it does sound like a dot-com bubble the next low you'll still see from that point a 27% drop to the actual bottom.
If this market structure plays out, the total market capitalization of all cryptocurrencies will eventually bottom out at around $500 billion.
Cowen warns that there is never certainty in the market and says that bulls can make a coherent case that the bottom for bitcoin is already there.
He tells traders that it is never a bad idea to keep some cash in case the market volatility is lower than you think is possible or probable.
This is something to consider. It is the worst case scenario. I don't know if it's going to happen, but it's something that everyone I think should consider when navigating crypto.
I think a lot of people have burned in the past. You need to learn your lesson if you have not understood and understood downside risks with cryptocurrencies. If we see another foot down it will surprise many people.
Aug 29, 2022