Today was a weird day for the crypto markets. For the first time in seeming months, altcoins dramatically outperformed Bitcoin — managing to gain multiple percent on the market leader.
While Bitcoin has gained 2.5% over the past 24 hours, leading altcoins, including everything from Ethereum and EOS to Monero and Chainlink, have rallied higher by some 7% or 9%, and even further in some cases.
With this being one of the first trading sessions in a blue moon that altcoins have managed to outpace the market leader, investors are wondering if this (dare I say) micro-altseason will continue. Analysts have weighed in. And interestingly, they report that Bitcoin bulls may be having it a bit tough.
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Altcoins May Get (Some) Reprieve
According to Bitcoin Bravado’s lead analyst, Jack, selling altcoins at this point in time is nonsensical. In the tweet below, he argued that BTC dominance, which recently hit a two-year high, is poised to “fall off a cliff”, potentially to collapse back to the low-60s or mid-50s.
As he points out, there is currently a fractal developing on the cryptocurrency market capitalization excluding Bitcoin chart (altcoin market capitalization, in other words). The fractal implies that altcoins are soon to see a strong bounce, potentially after BTC dominance rallies a bit more to “75% to 77.5%”.
If you’re selling your alts here, you are doing this wrong
You don’t get charts more beautiful than this one
If we get a nice consolidation after hitting the top box, continuation as squigly is likely
If not, still a monster rally pic.twitter.com/5hTjRrOuAI
— Bitcoin 𝕵ack (@BTC_JackSparrow) September 6, 2019
The chart below from Dave the Wave corroborates this. For those not versed in basic technical analysis, Dave is currently showing that BTC dominance is in a massive ascending wedge, which is a pattern marked by a tightening trading range and higher highs. Often, it resolves in the measure/asset falling dramatically lower, implying that altcoins may soon embark on more of a run.
The turn around or a leg higher? pic.twitter.com/1Ua8rrCBxK
— dave the wave (@davthewave) September 8, 2019
Still a Bitcoin-Driven Market
While the technicals seem to be in the favor of altcoiners, the narrative still seems to be one centered around Bitcoin.
As reported by NewsBTC previously, Anthony Pompliano, a Morgan Creek Digital partner, stated that Bitcoin dominance will only continue to gain steam. While the prominent investor didn’t mention an exact target, he expects his firm’s index, which includes nine leading altcoins, to naturally float towards a BTC dominance of 95% from the 80% where it stands today.
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Prominent commodities trader Peter Brandt has echoed this line. In a recent tweet, the Bitcoin maximalist claimed that in five years, 99% of all crypto assets will be a distant memory.
Pompliano and Brandt aren’t just postulating.
The market, right now, is entirely Bitcoin centric.
There’s a reason why Bakkt is focusing on Bitcoin for its custody and futures solution, opting to only offer products for the leading cryptocurrency reason, or why Grayscale’s Bitcoin Trust has gained massive traction, but its Ethereum or ZCash Trusts have not.
Also, from a macroeconomic perspective, Bitcoin makes sense over, say, altcoins. You see, the world is believed by many — everyone from cryptocurrency proponents to central bankers and Wall Street investors — to be heading into recessionary territory.
Should cryptocurrencies act as a safe haven, Bitcoin will be investors’ first choice due to its proven anti-fragility, scarcity, decentralization, and simple network effects.
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