Altcoins Keep Losing Ground to Bitcoin as QT Squeezes Market Liquidity

• Cowen says altcoin-to-BTC ratio could fall from 0.34 to 0.25 amid QT-driven liquidity contraction
• Bitcoin dominance nears 66% while altcoins face pressure from declining market flows
• Altcoins continue to underperform as Cowen’s chart shows descending triangle breakdown

Crypto analyst Benjamin Cowen expects altcoins to continue underperforming against Bitcoin. He warns the key altcoin-to-Bitcoin market cap ratio could fall from its current 0.34 level toward 0.25, citing ongoing Quantitative Tightening (QT) and declining market liquidity as primary drivers.

Cowen Analysis: Alt/BTC Ratio Chart Signals Further Downside

Cowen shared a chart on X, Cowen tracks the total altcoin market cap (excluding Ethereum) relative to Bitcoin’s. This ratio shows a steady decline over the past year, currently resting near 0.34.

Related: The S&P, Bitcoin Dominance, and a Brewing Altcoin Setup – Here’s What’s at Stake

Cowen believes the next support level lies at 0.32, with a longer-term target of 0.25. The chart shows a descending triangle pattern, which often signals further downward momentum. “With QT continuing, it seems likely that the altcoin pairs against Bitcoin will keep dropping,” Cowen wrote.

Quantitative Tightening (QT) Seen Favoring Bitcoin Over Altcoins

The analyst tied the trend to global Quantitative Tightening, particularly by the U.S. Federal Reserve. QT involves reducing central banks’ balance sheets by selling government bonds, effectively pulling liquidity out of the economy.

Cowen has previously argued that market liquidity is a major driver of crypto performance. When liquidity shrinks, investors tend to move away from riskier assets like small-cap altcoins and prefer Bitcoin, which is perceived as more stable and less volatile.

Bitcoin Dominance Nears 66% Target, Reflecting Altcoin Weakness

Supporting his thesis, Cowen also noted that Bitcoin’s dominance, its share of the total crypto market, may soon reach 66%. As of this press time, Bitcoin dominance stands at 65.14%, representing a minor 0.3% correction in the past day. 

Over the past month, Bitcoin dominance climbed 2.55%, adding to its year-to-date growth of 12.1%, showing consistent dominance over altcoins. Historically, such dominance spikes have occurred during bear markets or macroeconomic tightening.

Related: FOMC meeting this week: All eyes on Powell for rate hints and potential QT end, impacting crypto

In previous cycles, Bitcoin dominance rose significantly before altcoins found a bottom, creating room for a rebound. Despite Cowen’s bearish outlook, other analysts remain confident in the performance of altcoins in this cycle.

Notably, Bitcoin broke the $99K level today following a 3% surge. Altcoins are gradually capitalizing on Bitcoin momentum.