- The recent outflow of altcoin liquidity from Bitcoin could have an adverse effect.
- Although bulls defended BTC at $29,987, the coin was deprived of demand.
- BTC was oversold but a short-term retracement may not be on the cards.
Crypto analyst and Into The CryptoVerse CEO told his YouTube viewers that the altcoin market has given a clue on how Bitcoin (BTC) will behave in the coming months. Speaking at a session with his community, Cowen mentioned that the broader expectation in 2023 was for the market to get “rekt”.
The analyst highlighted that Bitcoin was above its bull market support band. He, however, noted that the average altcoin market was below the support band.
BTC has altcoins to thank
So, he concluded, “The reason that Bitcoin has gone up is not necessarily because of new money coming in. It’s more of liquidity flowing from the altcoin market to Bitcoin.”
One piece of evidence of this viewpoint is the manner in which Bitcoin has correlated with Ethereum (ETH) for most of the year. According to CoinMarketCap, the BTC/ETH price was worth $1,672 or 0.0655 BTC at press time.
Cowen also mentioned that one of the reasons BTC was experiencing a decline was because of how liquidity from the altcoin market was channeled somewhere else.
Backing his point, the analyst said that the flow of liquidity into meme coins affected Bitcoin negatively. Therefore, the liquidity lack in the altcoin market could draw another fall in the BTC price.
The coin is exposed to a longer descending channel
By looking at the technical angle, BTC could find it difficult to hold on to its recent resurgence. On June 8 demand appeared as the coin tested $26,868.
Unfortunately, Bitcoin could not hold the region as an overwhelming sell pressure caused another round of price dumps. According to the daily timeframe, BTC fell to $24,987. Although bulls have been able to defend BTC from a further low, another bearish outlook could soon appear.
One reason for this is the Relative Strength Index (RSI). As of this writing, the RSI was edging closer to the oversold region.
Thus, if the indicator drops further than 39.96, then seeing BTC in a longer descending channel (white lines) might be unavoidable.
In a related development, Bitcoin researcher Jame Straten mentioned that BTC might not have its bottom yet. Straten, who is also a data analyst, referred to the recent USDT depeg. While highlighting that such occurrences historically signify a BTC bottom, however, he stated that the recent one was nominal.
Therefore, Bitcoin’s chances of a significant recovery remain low. At the same time, a downtrend from $25,000 is one event that can recur in the short term.
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