A widely followed crypto analyst says that the Federal Reserve will likely keep rates higher for longer at the expense of risk-on assets like altcoins until something breaks.

In a new strategy session, crypto trader Benjamin Cowen tells his 788,000 YouTube subscribers that the Federal Reserve won’t care to cut interest rates until the S&P 500 witnesses a severe corrective move.

“Liquidity is flowing from high risk to low risk. [It] doesn’t mean the lower risk things can’t drop, it’s just that when they drop, that normally marks the end because when they drop then the Fed notices.

When the S&P drops, then the Fed starts to notice. Do you think the Fed cared about the S&P when it was at 4,600? No, it’s too elevated.

Do they care with it at 4,100? Probably not. Will they care if it’s at 3,500 or 3,400? Yes, they will start to care and that is when they’ll start to cut is my guess. So watch the S&P if you’re curious about when altcoins will turn around against Bitcoin.”

As long as the stock market remains elevated, Cowen believes that the Bitcoin dominance (BTC.D) chart, which tracks the percentage of the total market cap that belongs to Bitcoin (BTC), will continue to rise, causing many altcoins to lag behind the crypto king.

Cowen also says that historically, BTC.D tends to reverse its uptrend when the Fed begins the rate-cutting cycle. Until then, he expects crypto investors to redirect their capital from altcoins to Bitcoin.

“The more important thing to recognize is that [BTC] dominance topped out in September last cycle because the Fed had already started cutting rates – we haven’t even seen the Fed start cutting rates yet, and last cycle it took another month or two after the first rate cut where dominance even topped out… so why should be assume the dominance has topped out?

The S&P 500 is currently at 4,117 at time of writing, while BTC’s market dominance is sitting at 54%.

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