Crypto Market Hits Historic Low, Analyst Warns More Downside Ahead
The cryptocurrency market has reached its cheapest level since 2010, but investors should not expect the bottom to come anytime soon according to Benjamin Cowen. The Into The Cryptoverse founder believes that historical trends and macroeconomic conditions suggest another leg lower could arrive before the market begins its next recovery.
Cowen's logarithmic regression model estimated the fair value of the total crypto market capitalization at around $5.74 trillion, which is roughly 62.5% below its long-term trend. This makes it one of the most undervalued periods in crypto history, only surpassed by September 2010 when Bitcoin was still in its early days.
Cowen pointed to weaker retail participation and recent security incidents as factors weighing on market sentiment. He also expects Bitcoin to face renewed weakness during the third quarter, citing historical performance in U.S. midterm election years where August and September tend to produce the weakest average returns.