Bitcoin [BTC] closed 6.5% higher at $10,400 on a weekly scale. The week saw another altcoin dumping as Bitcoins dominance crossed above 70%. Nevertheless, the alts have made a brief comeback during the weekend. While the gains are slight, this is one of the very few instances of altcoin rise relative to BTC this year.
Crypto analyst Willy Woo, however, suggests that this rise has could be temporary. He said in a tweet,
Though locally oversold and may see some bounce in coming weeks, longer term, into 2020, I can’t see these levels holding (relative to Bitcoin).
Currently, altcoins are testing their three-year support w.r.t BTC. The weekly RSI of altcoins with respect to Bitcoin’s Market capitalization is currently oversold. This could be a level of reversal. However, Woo suggested that room to grow is not very large. According to him, the next rise could be one of the last attempts for altcoin revival.
Moreover, while Bitcoin is finding utility as a store of value, the fundamentals and regulation around altcoins have been weak post the ICO bubble of 2017.
According to him, the parity between Bitcoin and crypto market was close before 2016. However, due to the ICO scams and fraudulent investment schemes, the price blew-up in a bubble.
Here’s the same data visualised on the price domain. Total crypto cap priced in BTC supply.
The 2017 gap that opened up was made of ponzi fluff, ERC20 ICOs investing in other ERC20 ICOs blowing up their combined caps like a fiat money printing machine.
Furthermore, while the rise in Bitcoin was tremendous as well during the 2017 bubble. The rise in altcoins was astronomic. Ripple, for instance, recorded yearly gains near 19000% through 2017. Hence, he feels that the correction to those levels hasn’t occurred yet. The current sentiments are nowhere near hyped value.
According to Woo, altcoins will continue losing value w.r.t to Bitcoin. Therefore, the only chance of a rise in value is if the Bitcoin price continues to grow upwards. He says as they are testing the lows on the trendline with Bitcoin, this level could be the last area of support. He tweeted,
If this level fails, I’d expect roughly a 60% drop relative to Bitcoin’s cap before we some the next area of support.
Willy Woo is also a Bitcoin bull. Hence, this time if Bitcoin reaches $20,000, the dominance of bitcoin over the crypto-market could be bear near 83%. Coincidentally, it also aligns with the psychological levels in the market established by Max Keizer’s similar prediction. During the 2017 run, it was less than 50%.
Do you have any additions or comments on Woo’s analysis? Please share your views with us.
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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