Back in 2017 a clear pattern emerged between Bitcoin and the altcoins. BTC was (and still is) the bellwether for the entire market, leading the peaks and troughs. However, they were also inversely correlated in that altcoins would often dump before Bitcoin made a big move.
Altcoins Losing Steam
The same could be happening again as Bitcoin maintains its hold on the $5,200 price level but its brethren start to fall back. As a result Bitcoin market dominance has climbed a percent or so back to 51.3% over the past week or two.
Today’s markets are a sea of red as altcoins begin to beat a retreat. Total market capitalization has dropped back below $180 billion after reaching a new 2019 high of just below $186 billion yesterday. Markets have lost over $5 billion in the past 24 hours and those losses are accelerating during today’s Asian trading session.
The largest daily losses at the moment are with Binance Coin, Cardano, Bitcoin SV, NEO, Ethereum Classic, and Dogecoin which have all lost over 7 percent on the day. Litecoin and Bitcoin Cash, two of April’s big performers, are also cooling off today with losses of around 6 percent.
Even the three newly listed altcoins on Coinbase Pro are losing today. EOS is down over 2% to $5.40, Maker has dumped 7% to $707 and Augur has dropped 6% back to $20.40. Coinbase is no longer the provider of coin pumps and this latest announcement has actually had the opposite effect.
Markets are beginning to cool and the altcoins are getting hit first. This could either be a sign that traders are moving back into Bitcoin or that BTC itself is about to make a big pullback. Two years ago this type of market action would signify a big move coming for Bitcoin but in today’s market of multiple stablecoins it is unlikely to be the case.
The calls for a pullback have intensified as Bitcoin approached a massive resistance point at the 50 week moving average which is at around $5,600. Over the past 24 hours BTC hit $5,300 twice before dropping back and at the time of writing it is has just fallen below $5,200 support;
Several other analysts have also speculated that a correction is imminent with Bitcoin dropping back into the $4,000s. The worst case scenario is a final capitulation back below $4k, which has also been predicted by many. This will certainly wipe out all gains made by most altcoins this year but will also serve as a great opportunity to accumulate for the next big rally.