The beginning of the year saw Bitcoin [BTC] and altcoins deep in a bearish market as they tested their lows. The probability of their demise or rise was almost equal with them sharing similar dominance ratios.
However, in less than eight months into the year, the dynamics of the cryptocurrency markets have shifted vastly. Bitcoin’s dominance has grown to about 70%.
Altcoins Break Below Support Levels
Currently, the market capitalization of Bitcoin [BTC] is $210 billion, while the combined Market Cap of altcoins is about $95 billion. Major altcoins have broken below their support levels.
Ethereum [ETH] which broke below the 0.025 BTC support level was expecting a pullback. However, continued selling pressure has driven the price below the break-out level at the beginning of 2017 altcoin run. Ethereum’s price w.r.t. to Bitcoin is currently testing 28-month support levels.
Similarly, XRP has also broken below 0.00003 BTC and is back to $0.3 support level. XRP has continued to fall back to this level repeatedly this year. The price of XRP w.r.t. Bitcoin is around 0.000025 BTC. Moreover, on further downwards move the next support to XRP is near 0.000013 BTC.
Cryptocurrencies like Bitcoin Cash [BCH] and Bitcoin SV [BCV] ‘hodlers’ are reeling under extended pressures as the total mining hash rate continues to drop. This motivates miners to switch to more profitable coins or turn off their system. Moreover, it also increases the chances of a 51% attack on the token.
All is Not Lost?
Nevertheless, Bitcoin is trading at more than ten times its price during March 2017. Hence, the price of altcoins w.r.t USD has risen proportionally as well.
Furthermore, for most altcoins, including Litecoin, EOS, BCH, ETH and so on, the lowest level w.r.t USD was achieved during December 2018. Some of the altcoins are still trading 150% higher from those lows.
Numerous analysts have validated the de-coupling of altcoins from Bitcoin’s price. Max Keizer, Vinny Lingham, and Tone Vays are some of the Bitcoin maximalists who have appreciated the current trend. According to them, the ‘shitcoins’ are a liability to the market, and their weight must be shed for sustainable growth of the market.
Nevertheless, Peter Schiff, a gold buff and Bitcoin basher holds contradictory views. According to him, the altcoins failure will be followed by the demise of Bitcoin. He said,
Those arguing the collapse of altcoins validates Bitcoin are whistling past the crypto graveyard. Altcoin demand drives the Bitcoin on-ramp. The weakest links of a chain break first. Once confidence in altcoins is lost, Bitcoin is next. The similarities outweigh the differences.
The price markets of cryptocurrencies resembled that of the dot com bubble during the 1990s. Hence, various analysts have extended the analogy to cryptocurrency markets, suggesting that like the FAANG, only a handful of altcoins will succeed in the end. However, it seems that it will be determined at the end of this ‘reverse alt season.’
Do you think alt-season will ever occur again? Please share your views with us.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com