TLDR;
In this AMA, Benjamin Cowen discusses the current state of the cryptocurrency market, focusing on Bitcoin, Ethereum, and altcoins. He anticipates a rotation back to Bitcoin in September-October, with a potential correction in Ethereum during September followed by another rally. Cowen also addresses questions about Bitcoin's seasonality, altcoin performance, and potential market scenarios, providing insights into his investment strategies and risk management.
- Expects alts to outperform Bitcoin for a few more days but anticipates a rotation back to Bitcoin in September-October.
- Predicts a potential 30% drop for Ethereum in September, followed by another rally.
- Suggests that Bitcoin dominance will increase in September and October.
Market Overview and Predictions [0:04]
Cowen believes altcoins may continue to outperform Bitcoin in the short term, but anticipates a shift back to Bitcoin dominance around September or October. He expects Ethereum to maintain its position near all-time highs for a few more days, followed by a correction in September and a subsequent rally. The timing and magnitude of these movements depend on various factors, including Bitcoin's performance and overall market conditions.
Bitcoin and Ethereum Scenarios [1:02]
Cowen explores potential scenarios for Bitcoin and Ethereum, considering whether Bitcoin will test its 20-week Simple Moving Average (SMA) or the 50-week SMA. He notes the difficulty in predicting Ethereum's potential 30% drop in September if Bitcoin's downside is limited. Two possibilities include Bitcoin dropping to the 20-week SMA, causing Ethereum to fall, or Bitcoin directly testing the 50-week SMA. He suggests that a low will likely form in September, with Bitcoin dominance increasing.
Cycling Between Bitcoin and Altcoins [4:02]
Cowen advises that it might be time to shift back to Bitcoin rather than to altcoins. He suggests that if the market cycle continues as expected, fading Bitcoin dominance might be appropriate around November. However, he recommends becoming bullish on Bitcoin dominance in the short term, particularly heading into September and October.
Bitcoin's August Performance and September Outlook [4:29]
Cowen addresses concerns about Bitcoin's red August, clarifying that Bitcoin did reach a new all-time high during the month. He emphasizes that it could still end as a green month and that his prediction is for Bitcoin to form a low in September, not necessarily decline throughout the entire month. He estimates that if Bitcoin drops to the 50-week SMA, altcoins could drop twice as much.
Portfolio Strategy and Risk Management [6:57]
Cowen discusses portfolio allocation, suggesting that maintaining a 15-30% "huddle stack" of Bitcoin is prudent even during a bear market. He clarifies that a 30% drop for Ethereum would be calculated from its peak. For those with a high Bitcoin allocation, he suggests considering taking profits as September approaches, depending on individual risk tolerance.
Ethereum's Potential and Altcoin Recommendations [9:24]
Cowen believes it's possible for Ethereum to reach another high before September 2nd, requiring one more divergence on the Relative Strength Index (RSI). He reiterates that if Ethereum experiences another divergence, it would likely mark the local top before a 30% drop. He also touches on altcoin recommendations, emphasizing the importance of assessing individual risk tolerance.
Altcoin Bottoms and Bitcoin Rotation [12:18]
Cowen anticipates that altcoins will decline against Bitcoin during a September pullback and as Bitcoin rallies in October. He suggests that during a potential Q4 mania phase, the low formed in September could be an opportunity to buy. He also notes that if Bitcoin and Ethereum rally, Cardano could potentially revisit its trend line.
Gold, Palladium, and Market Cycle Timing [13:38]
Cowen shares his outlook on gold and palladium, expecting gold to move higher soon and palladium to bottom out near current prices before rallying. He suggests that if the market cycle extends into Q1 2026, it's more likely that the total market cap, rather than Bitcoin, will reach a higher high. He also notes the potential for a negative reaction in late October if the Bank of Japan raises rates.
Bitcoin Miners and Altcoin Analysis [18:41]
Cowen expects Bitcoin miners to underperform until the final rally and advises against holding them in 2026. He believes that if Ethereum drops to $3,500-$4,000 in September, it will likely reach a new all-time high by late October. He expresses a less optimistic view on Polkadot, considering it a potential relic, and provides potential entry points for Chainlink against Bitcoin.
Interest Rates and All Season Timing [21:40]
Cowen discusses the possibility of an altseason occurring with interest rates above the neutral rate, suggesting that Federal Reserve rate cuts could influence this. He anticipates a rotation to Bitcoin in September-October, with a potential altseason in November if it occurs. He also shares his expectations for gold, anticipating a breakout followed by a correction in 2026.
AI and Nvidia's Market Influence [23:46]
Cowen touches on the AI sector, noting that efficiency expectations might be too high in the short term. He draws parallels between Nvidia's current pattern and its performance in 2021, suggesting a potential correction followed by a market cycle top. He also believes altcoins could outperform Ethereum after Ethereum durably makes all-time highs.
DCA Strategies and Bitcoin Dominance [25:44]
Cowen recommends Dollar-Cost Averaging (DCA) into altcoins if valuing a portfolio in USD, but advises sticking with Bitcoin if valuing in sats for the next couple of months. He expects Bitcoin dominance to increase in September and October, which would not be conducive to an altseason. He also discusses dynamic DCA strategies for selling Bitcoin based on risk levels.
Bitcoin's Potential and Market Comparisons [27:51]
Cowen explores the possibility of a recession in 2026, noting that not all bear markets are associated with recessions. He compares Bitcoin's current rally to the 2017 cycle, suggesting that if Bitcoin experiences a similar move, it could reach $200,000. However, he cautions that macro uncertainty could limit Bitcoin's upside.
Risk Levels and Market Dynamics [31:45]
Cowen advises respecting risk levels for now but suggests that if Bitcoin underperforms by November or December, a time-based approach might be more appropriate. He notes that Bitcoin's recent return is less explosive than in 2017, which could impact its potential peak. He also suggests that a parabolic rally in Q4 could drive Bitcoin dominance higher.
Ethereum Targets and Market Pullbacks [35:49]
Cowen estimates Ethereum's potential top between $5,300 and $7,500. He clarifies that a 30% drop for Ethereum would be from its high to the September low. He also touches on various altcoins, including Solana, and discusses potential rotations within the altcoin market.
Altcoin Analysis and Market Manipulation [36:58]
Cowen analyzes several altcoins, including Solana, and notes that Chainlink has shown recent strength. He expresses skepticism about market manipulation claims, particularly for assets with large market caps like Bitcoin. He also discusses potential cool-downs in the stock market and suggests monitoring the S&P divided by M2.
Altcoin Strategies and Market Timing [38:57]
Cowen suggests looking for altcoins putting in higher lows against Bitcoin for potential trades in late October or early November. He anticipates a pullback in September, with a low around mid-month, followed by an upward movement. He also notes that miners often lag until the end of the cycle.
Gold, Ethereum, and Market Corrections [39:56]
Cowen anticipates a gold pullback in 2026, potentially between March and May. He acknowledges Ethereum's recent strong move and suggests that if Ethereum rallies to a new high before a drop, it will likely occur by the first few days of September. He also discusses the likelihood of another rally before a downturn.
Double Bottoms and Market Sentiment [41:10]
Cowen discusses the characteristics of double bottoms, noting that a slightly higher low is preferable. He expresses caution about altcoins forming lower lows. He also shares his bullish outlook on Alibaba and suggests that the low for Ethereum against Bitcoin is likely in for the cycle.
Market Dynamics and Benford's Law [42:55]
Cowen suggests that Solana could outperform Ethereum in September and October, even if the altcoin market collectively declines. He concludes by discussing Benford's Law and its application to Ethereum, noting that Ethereum tends to spend more time at prices starting with one and two.