Benjamin Cowen presents a strong thesis that Bitcoin dominance (BTC.D) is due for an "explosive move" above 60% and will pierce through the bull market support band. He argues that understanding dominance is essential for success in crypto, warning that ignoring it often leads investors to "fomo" into altcoins that are not only riskier than Bitcoin but have historically provided lower returns as liquidity flows "back to the king."
He dismisses the common expectation of rejection at the current level, favoring the view that BTC.D is following a pattern seen in prior cycles. In both 2017 and 2020, dominance put in a low in September and began a powerful rally into the end of the year, with the key breakout occurring around mid-October. Given the current timing, he feels this time will be no different.
Cowen also addresses potential bearish narratives related to monetary policy, specifically the Federal Reserve ending Quantitative Tightening (QT) or cutting interest rates. He notes that while ending QT could be a reason to adjust his view, the last time this occurred in 2019, dominance had already seen a major run-up in the months leading to the event.
Regarding interest rate cuts, he argues they have not been bearish for Bitcoin dominance because the current cuts are still happening while the Federal Funds Rate is above the theoretical neutral rate, which he approximates using the 2-year yield. As long as policy remains restrictive—that is, above the neutral rate—he contends it is actually bullish for Bitcoin dominance. For altcoins to see a massive rally, he believes the Fed would need to cut rates below the neutral level. He concludes with high conviction that the "final rotation is continuing" and the "floodgates on dominance are about to open," preparing for a significant surge above 60%.
