Analyst Benjamin Cowen is detailing a potential worst case scenario for Bitcoin and the crypto markets at large.
In a new video to his 765,000 YouTube subscribers, Cowen looks at the dot-com bubble’s infamous burst for clues on where digital asset markets may end up.
Looking at the total market cap of all crypto assets, the analyst says the current pullback could continue to drop to about the $760 billion mark.
At that point, Cowen says a 60% bounce would be proportional to a bounce witnessed in the dot-com era, bringing the total market cap back to the $1 trillion level.
If and when that happens, Cowen says the markets will land in a very tricky spot.
“If we do get a 60% bounce off a future bottom – let’s say it happens at the end of the year – a lot of people would assume that’s the bottom and to some degree I would probably assume that’s the bottom…
But we should always remember that there is no sure thing with regards to investing there is always a risk that you’re taking on no matter how confident you are that something will play out.
And if it were to play out the same way as the dot-com bubble then that next low you would still see from that point another 27% drop to the actual bottom.”
If this market structure plays out, the total market cap of all cryptocurrencies would finally reach a bottom at around the $500 billion mark.
Cowen cautions that there is never certainty in markets, and says bulls can make a coherent case that the bottom for Bitcoin is already in.
He tells traders it’s never a bad idea to keep some cash on hand in case markets move lower than you think is likely or possible.
“This is something to consider. It’s the worst case scenario. I have no idea if it’s going to play out or not, but it’s something that everyone I think should consider when navigating the cryptoverse.
I think a lot of people have burned in the past. You need to learn your lesson if you haven’t already and understand the downside risk with cryptocurrency. If we do see another leg down it’s going to take a lot of people by surprise.”
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Read More:Here’s the Worst Case Scenario for Bitcoin and Crypto Markets, According to Analyst Benjamin Cowen
2022-08-28 16:57:30
