Renowned crypto analyst Benjamin Cowen is closely watching how Federal Reserve rate cuts and upcoming economic data releases might affect the digital asset market, especially Bitcoin and altcoins. He warns of a potential market correction in the second quarter if the Federal Reserve reduces rates in response to economic indicators like the March CPI and FOMC minutes due this week. Analysts are echoing his concerns about a looming larger correction that could unsettle altcoins.

Let’s dive into the details to understand this better.

Reading Economic Signs: What They Mean for Altcoins

Cowen suggests that if altcoins lose value against Bitcoin, indicated by the alt/Bitcoin pairs, it could indicate growing recessionary pressures. In simpler terms, if altcoins become worth less compared to Bitcoin, it might mean trouble ahead. Cowen also points out the importance of keeping an eye on the TOTAL3 versus Bitcoin pair, which shows how strong the altcoin market is compared to Bitcoin, Ethereum, and stablecoins.

Cowen also talks about the Bitcoin halving, a major event where the block reward is reduced, lowering the yearly inflation rate. Despite this reduction, Cowen believes that miners will still make good profits because of Bitcoin’s increasing value, ensuring the network remains secure.

Understanding the Impact on Bitcoin Dominance

Cowen explains how the timing of rate cuts could affect Bitcoin dominance (BTC.D), which measures how much of the overall crypto market Bitcoin controls. He thinks that if rate cuts are delayed until July, Bitcoin could become even more dominant, which might not be good news for altcoins.

Read More: CPI Release, Fed Meeting Coming Up! How Will the Bitcoin Price React?

What Should You Do: Hold or Sell?

In a market where prices usually go up, driven mostly by Bitcoin, Cowen says corrections are normal but not usually too severe, usually around 20% or less. Right now, Bitcoin’s correction is about 17.5%, so there’s still room for it to grow. Cowen advises against selling too soon, warning that it could be a costly mistake if the market keeps going up.

As we ride through this bullish market, the big question is whether to hold onto our assets or sell. It’s a decision that depends on our risk tolerance, goals, and what we think will happen in the market. While market downturns are expected, timing them perfectly is tricky. That’s why it’s important to consider our long-term goals and stay informed about what experts like Cowen are saying about market trends.

Also Read: Top Altcoins to Turn Your $1k to $100k This Bull Market

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