Analyzing Altcoin Season And The Impact Of A New Bitcoin All-Time High
October 12 2021 - 4:00PM
NEWSBTC
Bitcoin price is only striking distance away from potentially
setting a new all-time high, or only about a 15% move higher for
the new record to be set. As the top-ranked cryptocurrency
surprisingly weathers the macro turmoil as of late, altcoins have
suffered dramatically and for the most part bled while BTC has been
rising. Alt investors are capitulating, and moving their capital
into BTC as to not miss the coming last leg up. But what exactly
does this mean for the ongoing altcoin season? Is it over? Or will
there be another leg up like there could be in Bitcoin – a move
that is becoming increasingly clear by the day? Alt Season, Bitcoin
Dominance, And The Theory Of Five Waves Down Bitcoin and altcoins
have a very unusual relationship, despite being assets of the same
class. Top traders such as Nik Patel have spent years working to
understand the strange, cyclical behavior between BTC and alts, and
have found some success. After such an explosive altcoin season,
the market is convinced that the music has already stopped, asset
prices have topped out, and have started to reallocate heavily into
the strength of BTC. Related Reading | How 90-Year Old Market
Wizardry Predicted The Bitcoin Breakout But much like Bitcoin’s
recent pullback is close to proving to be little more than a
massive bull market shakeout, due to the relationship between alts
and BTC, this divergence between the two types of crypto assets
could be a similar shakeout. BTC dominance suggests another wave
down. | Source: CRYPTOCAP-BTC.D on TradingView.com Many analysts,
such as Elliott Wave International’s Tony Carrion, subscribe to the
idea that BTC is about to enter a wave five impulse against the
dollar. That would suggest that BTC just completed a wave four,
which in the end was a big bear trap. But what if alts are close to
finishing a wave four against BTC, with another wave to follow?
That’s exactly the picture BTC dominance tells. Comparing the total
altcoin market cap sans BTC against the king itself, shows that
alts might shockingly be undervalued by comparison. A similar
shakeout in momentum can be seen during the last cycle using the
LMACD, pictured below. Alts are lagging behind BTC in valuation
comparatively. | Source: CRYPTOCAP-TOTAL2 on TradingView.com Which
Altcoin Will Survive Best Against BTC When Retail Returns? Looking
at the total crypto market cap and comparing it against Bitcoin
price, there are some similarities between the two potential points
highlighted by an ascending triangle. The bullish chart pattern if
valid would result in a similar up move – taking the cycle to its
climax in both Bitcoin and altcoins. An ascending triangle fractal
could launch alts to new highs. | Source: CRYPTOCAP-TOTAL on
TradingView.com With so many altcoins having already performed so
well, capital very well could flow into other lagging coins,
leading to underperformance in alts that have previously done well.
Related Reading | Astro Crypto: Summer Bitcoin Slump Could Bring
Bountiful Fall Harvest For example, during the last cycle, although
both BTC and ETH went on to new highs, it was Litecoin and XRP that
performed the best during the last leg up. Both assets were well
below the triangle consolidation during the last cycle, and once
again have found themselves lagging severely behind. Is this time
different? Not much has changed from cycle to cycle.
Underperforming altcoins could perform the best in the next wave |
Source: CRYPTOCAP-TOTAL on TradingView.com The direction of BTC
dominance can be deceiving, as the direction of the chart is down
when altcoins are doing well. The rest of the charts, which use the
same assets in unique juxtapositions, make for a more compelling
argument as to why altcoin season has barely even started yet. And
the current divergence between BTC and alts is possible the same
type of a shakeout that most of the market just fell for in the
BTCUSD trading pair. The psychology behind this expectation, is
that the market has realized it was wrong about BTC, and is selling
USD, alts, anything to get back into position. When Bitcoin gets
back to new all-time highs and attracts more attention to the
market, newcomers will go to alts and not BTC. The higher the
top-ranked cryptocurrency gets toward $100,000 and more, the less
likely anyone but institutions or the extremely wealthy can afford
it. Altcoins will be the next best bet – especially ones that have
no sellers remaining such as those that have underperformed thus
far. This is the best alpha I can offer regarding the future of
#Bitcoin price. I do not think we see a lower low, regardless of if
we continue to correct. Bears will not get their win before bulls
get $100K. All info pulled directly from the source:
https://t.co/BhmNxjeE4I pic.twitter.com/WU6snm9aCu — Tony "The
Bull" Spilotro (@tonyspilotroBTC) September 23, 2021 Follow
@TonySpilotroBTC on Twitter or via the TonyTradesBTC Telegram.
Content is educational and should not be considered
investment advice. Featured image from iStockPhoto, Charts from
TradingView.com
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