2020-11-12 19:30 |
Altcoins have been rocketing higher throughout the past few days and weeks, reaping the rewards of a stable Bitcoin and high Ethereum prices.
Tokens within the decentralized finance sector – commonly referred to as DeFi – have been some of the biggest beneficiaries of the recent market-wide strength.
Yearn.finance is currently trading up well over 100% from its weekly lows, while other blue-chip tokens within this sector have seen similar gains. Aave’s token is also up well over 100% and showing no signs of slowing down anytime soon.
This trend marks a departure from that seen over the past several weeks, as previously, Bitcoin’s price had been sucking the oxygen out of the room – rallying while many altcoins posted notable losses and drifted lower.
As BTC stalls below $16,000 and its short-term upside potential dwindles, investors appear to be rotating capital away from BTC and into altcoins in hopes of seeing larger returns.
One analyst believes that this trend could just be getting started.
He explained in a recent tweet that Bitcoin could soon enter what could be a prolonged consolidation phase. This will open the gates for a full-fledged “altseason” that allows the tokens to post significant gains – he claims.
Bitcoin Consolidates Below $16,000 as Momentum StallsBitcoin’s recent multi-week uptrend has consisted of it seeing multiple strong upswing that were typically followed by consolidation phases.
These consolidation bouts are typically short-lived and rapidly followed by the cryptocurrency posting another leg higher.
It is currently caught within one of its longer bouts of sideways trading, which is a testament to the intense resistance sitting at $16,000.
If it continues struggling to break above this level, then the crypto could soon bear witness to immense selling pressure or see a prolonged period of consolidation.
Potential BTC Consolidation Phase Could Propel Altcoins HigherWhile sharing his thoughts on where altcoins could trend in the near-term, one analyst explained that Bitcoin’s dominance and range-bound trading could both work greatly in altcoins’ favor.
“BTC (dominance) – holding support above previous resistance, as Bitcoin also holds close to recent swing highs… Alts look charged to move more if the price ranging can continue. Curious to see which ways this moves when Bitcoin moves out of range showing true alt strength.”
Image Courtesy of Chonis. Source: BTCUSD Dominance on TradingView.Unless Bitcoin regains the spotlight and posts a massive upswing, there’s a strong possibility that altcoins are about to see a second wave of immense momentum.
Featured image from Unsplash. Charts from TradingView.Similar to Notcoin - Blum - Airdrops In 2024
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