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Crypto analyst Benjamin Cowen offered a nuanced perspective on Solana’s (CRYPTO: SOL) recent performance and potential future trajectory, urging caution amid the altcoin’s impressive rally.
What Happened: In his latest podcast update, Cowen acknowledged he was correct in predicting Solana would drop below $10 in 2022 but admits he didn’t anticipate its subsequent 500% surge against Bitcoin (CRYPTO: BTC). He attributes this to his focus on Bitcoin dominance, which he expected to rise from 38% to 60% before altcoins outperformed. Coinmarketcap data shows Bitcoin dominance currently at 56%.
While Solana has rallied significantly, Cowen noted it hasn’t yet reached new all-time highs against Bitcoin, unlike some other altcoins in previous cycles.
He drew parallels between Solana's current pattern and Ethereum’s (CRYPTO: ETH) behaviour in past market cycles, suggesting Solana could follow a similar consolidation and correction path.
Cowen emphasized the importance of considering market cap valuations rather than just price, pointing out that Solana’s market cap relative to Bitcoin is near its 2021 peak. He speculated that macroeconomic factors, particularly the yield curve inversion, could trigger a pullback in Solana’s Bitcoin valuation.
Also Read: Solana A Security? SEC Concerns Reportedly Led To Pause In ETF Filing Process
Why It Matters: Cowen suggested Solana’s performance may depend on broader market dynamics, including Ethereum’s potential bottoming against Bitcoin and the Federal Reserve’s monetary policy shifts.
He maintains that most altcoins historically act as oscillators against Bitcoin, cautioning that rate cuts could lead to a breakdown in altcoin/Bitcoin pairs.
While acknowledging Solana’s strong performance, Cowen urges investors to remain aware of potential market shifts and the cyclical nature of altcoin performance relative to Bitcoin.
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
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