It’s been an explosive past few weeks for altcoins but not for Bitcoin.
As the leading cryptocurrency has stalled in the $8,000s and $9,000s as BTC investors have found themselves at an impasse, certain altcoins have ripped higher. Just look at the table below, shared by Tahar Zafar.
It shows that over the past week and even over the past three months, decentralized finance-focused altcoins such as Aave’s LEND and Kyber Network’s KNC have dramatically outperformed Bitcoin.
Bitcoin vs. DeFi tokens by Tahar Zafar
Altcoins, in general, have also outperformed Bitcoin, with Ethereum and other large-caps forcing higher as BTC has stalled.
The chart below of the performances of Bitcoin, small-cap altcoins, medium-cap altcoins, and large-cap altcoins, which was shared by a data analyst in crypto, displays this trend well.
BTC vs. low cap, mid cap, and large cap altcoins chart shared by cryptocurrency trader Ceteris Paribus (@Ceterispar1bus on Twitter).
Some say that this is the start of another “altseason,” but there is a growing sentiment that altcoins are poised to correct lower.
Altcoins May Finally Correct Lower After Strong Rally
Analyst Eric “Parabolic” Thies believes that Bitcoin’s market dominance is “ready to climb” after finding a local bottom around 66%.
Bitcoin dominance is the percentage of the cryptocurrency market made up of BTC: the lower the percentage, the more altcoins are worth relative to the original digital asset.
Bitcoin dominance chart (macro performance) shared by analyst Eric “Parabolic” Thies (@kingthies on Twitter). Chart from TradingView.com
Backing this sentiment, Thies shared the chart above on June 20th.
It shows that after plunging from its May highs, BTC dominance is seemingly poised to reverse higher as the measure holds a crucial macro uptrend and flatlines around 66%.
“#BTC dominance sitting at 66% and ready to climb. This means money will flow out of alts regardless of #BTC direction,” Thies explained on the matter.
Bitcoin Stands to Benefit
Bitcoin stands to benefit as the relative value of altcoins against BTC begins to revert to the downside. This is because the only viable way to cash out of a majority of altcoins, especially a majority of those that did well over recent weeks, is to buy the cryptocurrency market’s “reserve assets.”
This is not a foreign concept.
As reported by Bitcoinist previously, Kelvin “Spartan Black” Koh, a partner at The Spartan Group, said:
“We have seen a major re-rating in many of the smaller altcoins (esp DeFi ones) in the past 4-5 weeks while BTC has been range bound. At some point, the valuation of these alts will start to look frothy and the capital will flow back to BTC.”
Featured Image from Shutterstock
Price tags: btcusd, btcusdt, xbtusd
Charts from TradingView.com
Analyst Explains Why Money Is Poised to "Flow Out of Altcoins" Into Bitcoin origin »
While the Bitcoin price has been range trading over the past week, numerous altcoins have begun to pump. This is suggestive that due to the lack of volatility in BTC, investors and speculators are taking positions in altcoins, which have been moving at a considerably faster rate.
The St. Louis branch of the Federal Reserve bank has published a report seeking to examine the long-term prospects of BTC as an investment. The paper is highly critical of bullish outlooks for bitcoin, asserting that a “flood” of altcoins will deflate the price of all cryptocurrencies relative to fiat currencies over time.
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The BTC dominance rate is an indicator that tracks the percent of the total cryptocurrency market capitalization contributed by the leading cryptocurrency. So, a rising dominance rate essentially means the demand for bitcoin is greater than the demand for altcoins.
Christopher Matta, the Co-founder of Crescent Crypto Asset Management, and former Vice President at Goldman Sachs Investment Management Division, claimed in his debut on CNBC’s Fast Money that it is safer to hold a variety of altcoins rather than Bitcoin since this diversity would offer better risk-adjusted returns. The Crypto 20 Private Index Fund is […]
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FOMO Moments The bears have full control and crypto markets are sliding further again today. With almost $20 billion shaved off in 24 hours things are looking grim in crypto land. Bitcoin is falling dangerously close to $6,000 and altcoins are getting punished as usual.
Bitcoin price started a fresh upward move above $100,000. BTC is facing resistance at $103,000 and might aim for an upside break. Bitcoin started a decent upward move above the $100,000 zone. The price is trading below $103,200 and the 100 hourly Simple moving average.
Bitcoin price settled above the $100,500 resistance zone. BTC is consolidating gains and might aim for a fresh increase above the $105,000 zone. Bitcoin started a downside correction from the $106,800 zone.
Bitcoin price started a short-term downside correction from the $106,250 zone. BTC is consolidating above $100,000 and might aim for a fresh increase. Bitcoin started a downside correction from the $106,250 zone.
Bitcoin price is gaining pace above the $100,000 zone. BTC is rising and might accelerate higher if it clears the $102,000 zone. Bitcoin started a decent increase above the $100,000 zone. The price is trading above $100,500 and the 100 hourly Simple moving average.
Bitcoin price is consolidating losses below the $95,500 zone. BTC is showing bearish signs and might struggle to recover above the $95,800 level. Bitcoin started a recovery wave from the $91,150 zone.
