Benjamin Cowen he has shared his long-term view of cryptocurrencies on the Internet many times in the past, and the current situation is no different. In his analysis, he describes a potentially worst-case scenario for BTC and the entire cryptocurrency market.
He recently shared on his youtube channel video, where he describes the scenario of creating a potential correction bottom. In the video, he looked at tracking the dot-com bubble to better predict the final capitulation of the current cryptocurrency downturn.
Recently, the market capitalization fell below 1 trillion as BTC was deleted in 2022 capitalization of roughly 500 billion. Cowen also responded to the event, saying that the collapse in the value of cryptocurrencies could continue to $760 billion. At the time of writing this value is at the level of 969 billion dollars.
Capitalization of cryptocurrencies. Source: TradingView
In the event of such a collapse, Cowen predicted that there could be a positive trend reversal, with the capitalization returning above $1 trillion. It even counts with approximately 60% rebound:
“If we get a 60% bounce from the next bottom — let’s say it happens at the end of the year — a lot of people would assume that’s a bottom, and I would assume that as well.”
Cryptocurrencies with a capitalization of only 500 billion dollars?
However, Cowen cautions that nothing is certain in the field of investing and any prediction can be wrong. Investors should therefore be aware of this risk.
The analyst further explains that if the collapse were to take place much like the dot-com bubble, then we would see a fall of roughly 27% at the next low. That would mean drop in capitalization up to 500 billion dollars. However, the market is never certain and buyers can still reverse the trend in the near future.
Finally, he recommends that traders keep liquid money aside, which they can always use to buy more cryptocurrencies in a slump. Cowen himself said he doesn’t know if this worst-case scenario will become reality, but he considers it realistic.
