Cryptocurrency analyst Benjamin Cowen suggests that the dominance of Bitcoin (CRYPTO:BTC) could continue to rise, even after reaching its 60% target, following the Fed’s recent 25 basis point interest cut.
What happened to Bitcoin
In an update on his YouTube channel, Cowen discussed the Fed’s decision to cut interest rates to the lowest level since February 2023 and to maintain quantitative tightening by continuing to reduce its holdings of Treasury and backed securities. for mortgages.
He highlighted that Bitcoin dominance typically peaks (60%) only after quantitative easing begins. This time, Cowen sees two possible scenarios: Bitcoin’s dominance could begin a topping process, or it could surpass its peak before stabilizing again.
He also emphasized the importance of monitoring the performance of Ethereum (CRYPTO:ETH) vs. Bitcoin as it plays a pivotal role in dominance trends. Cowen recommended cost averaging on altcoins as the market enters the post-halving phase.
Citing the Federal Reserve’s press release, Cowen noted that the committee plans to “continue to reduce its holdings of Treasury securities and agency debt and agency mortgage-backed securities.” He emphasized the potential influence of this decision on the cryptocurrency market.
Why is it important
Despite his cautious outlook, Cowen anticipates that Bitcoin will stick to its cyclical behavior. However, he warned that a broader market correction could disrupt these patterns, affecting both Bitcoin and altcoins.
The Federal Reserve’s decision to cut interest rates has slowed the pace of cuts compared to September, when policymakers opted for a more substantial 0.5% cut to start the easing cycle.
A senior research strategist noted that the Fed’s gradual cuts toward a “neutral” 3% rate could be partly due to Trump’s policies, including tariffs, which could have a reflation effect.
You can also read: The price of Ether exceeds $2,800 after Trump’s victory and pro-crypto promises
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