For the first time in the history of a crypto market, the Bitcoin rally did not lead to an increase in altcoins. On the crypto market, confrontational relations are established, which are characteristic of the fiat market.
Bitcoin inspires confidence among investors with a long history of its existence and capitalization. In anticipation of the inevitable currency wars with the collapse of the dollar, investors consider Bitcoin as a safe haven. As for Ethereum or other alts – they do not. Therefore, Bitcoin dominance continues to hold above 65% and can still grow. Altcoin dominance continues to decline as for leading alts.
Technical analysis with a comparison of wonderful curves – confirms these concerns. Willy Woo, a well-known On-chain analyst, sadly remarks:
– Alt-season is not guaranteed, if it happens I can’t see it happening till end of 2019 / start of 2020.
Woo notices that alts pull up behind Bitcoin when it grows steadily without excessive volatility. The current Bitcoin season, according to Woo, is not at all the same, Bitcoin growth is caused by the activity of traders:
– Key things to look for are a steady and sustained bull run in BTC with good on-chain volume, this creates a low volatility band in BTC/USD due to buy pressure muting all sell-offs. The current regime is not this; it’s been an exchange driven game of trader activity dominance.
Coinstelegram analytical unit can agree with Willy Woo on-chain technical analyst only partly. We also do not expect a quick recovery of alts. But we assume that alts will grow on the expectations of the Ethereum hardfork Istanbul, which is scheduled for October 29th. All the alts on the ERC20 standard will grow too.
At the same time, the forks of Bitcoin itself will grow by that time. We assume that by the end of October, Bitcoin Dominance will drop to the “normal” level of 50%. And Ethereum will grow above $ 300. We cannot agree that the rise of Bitcoin is the result of the speculative game of traders. In our opinion, BTC rally is the result of the adoption of cryptocurrencies and Bitcoin as an asset for hedging. Among cryptoinvestors there are now funds and companies that engaged in asset management.
Willy Woo forecast is fundamentally at odds with ours. But do not underestimate the statements of this analyst. He is credited with creating the NVT indicator – the ratio of capitalization to daily transactions volume. According to popular opinion, NVT can provide data on the potential of one cryptocurrency in comparison with others. Now Willy Woo speaks out a terrible warning:
– A word of warning in alts. Alts very seldom perform long term across full cycles of bull/bear, only a select few historically have achieved this so far (ETH being one). So long term HODL of alts is not a great idea unless you know what you are doing.