Altseason Could Continue From Here
Over the past week, altcoins (crypto assets other than Bitcoin) have begun to slip. In fact, as of the time of writing this, Bitcoin dominance is sitting at a casual 54.4%, the highest this figure has read since mid-December, when BTC was in the midst of the capitulation to the low $3,000s. This recent altcoin action is starkly contrasted by the jaw-dropping rallies we saw in digital assets such as Litecoin, Binance Coin, Tezos, and EOS over the past few months.
But a number of analysts claim that altseason, which is when the cryptocurrency market sees its leader, BTC, underperform drastically, may soon continue.
In a chart posted earlier this week, Galaxy, a self-proclaimed “cryptocurrency accumulation machine,” claimed that the market capitalization of all digital assets, minus Bitcoin, is currently looking like a trend pinpointed by Thomas Bulkowski, a prominent technical analyst. The trend, for those unaware, is a falling wedge, which is often seen as a good sign for markets. Bulkwoski’s studies claim that the market capitalization currently has a 68% chance of breaking to the upside, meaning an altseason, and a chance to move 32% higher if the breakout does occur.
Tom Lee of Fundstrat has also suggested that altseason likely will come to fruition in the near future. The Fundstrat head of research took to Twitter last week to reveal that one of the “pre-conditions” for historical altcoin rallies is coming to life in the current cycle. This precursor, for those unaware, is a drop in the correlation between the crypto asset class at large and Bitcoin itself.
Per Lee’s chart, which cites data from Bloomberg, CoinMarketCap, and his own firm, a drop in the rolling 90-day correlation between the two subsets has preceded three altseasons — Mar 2016, early-2017, and late-2017/early-2018. An altseason, as defined by Fundstrat, is when a large percentage of altcoins in the “liquid universe” rally by over 200% in a short period of time.
Not So Fast, Bitcoin Remains Strong
Other analysts, however, have suggested that for the time being, and with the recent news regarding Bitfinex’s and Tether’s holding company, iFinex, in mind, BTC will outperform.
Inmortal Technique, an industry commentator and trader, recently suggested that Bitcoin’s market dominance has broken past a declining trendline, all while altcoins’ market dominance has remained trapped under a key resistance, indicating that BTC currently has the upper hand.
Speaking to Forbes, Mati Greenspan, the crypto-friendly markets analyst at eToro, has also opined that BTC could continue to outperform. He simply stated that “Altseason is over,” meaning that Bitcoin could soon see an influx of buying pressure from investors looking to liquidate their altcoin positions.
Photo by Austin Distel on Unsplash