Altcoins getting crushed, here's why
After a brief, couple day rally, altcoins have been selling off hard.
The price of steem was all the way up near $1.66 and is now trading in the low $1.40's.
This wouldn't be all that unusual regarding cryptocurrency volatility except that bitcoin is making new short term highs as I type.
Bitcoin just recently spiked up over $7,600.
Bitcoin continues to surge ahead while steem and the rest of the altcoin market is selling off... what gives?
Bitcoin surging is precisely the problem.
When the crypto rally began a few days back, everything went up as new money likely entered the space and short covering boosted prices.
However, when it became clear that much of the bitcoin rally had to do with the possible approval of a bitcoin ETF, money soon flowed out of altcoins and into bitcoin.
People want to ride the ETF momentum and make as much as the can on the coin that is likely to go up in the near term, which is bitcoin.
Therefore, the current strength in bitcoin is coming at the expense of every other coin.
Money is slaushing around from within the crypo space as opposed to new money coming in.
Bitcoin's dominance is now sitting north of 45%, the highest level since December of last year.
We saw this phenomenon several times in 2017 as well.
When bitcoin starts running up, the question always becomes; will it pull altcoins up with it or will it pull money out of altcoins?
Currently it appears to be the latter.
Last year we saw this happen on two different occasions surrounding hard forks of the bitcoin code.
The pain in the altcoin space was severe.
Hopefully we are not about to see something similar repeat this year.
Having bitcoin run up is great for the space as it is the one that attracts all the new money and gets talked about in the press, however, it's not so great when it crushes our beloved altcoins in the process.
Stay informed my friends.
Image Source:
https://steemkr.com/cryptocurrency/@aakashsinha/it-s-getting-worse-the-crypto-currency-blood-bath
Follow me: @jrcornel
That's a pretty sound summary. Any movement in Bitcoin is good for the market overall. I believe we'll ride BTC up to create some new value, then the alts are going to be looking so valuable vs BTC that the flows will reverse. This is my thoughts anyhow. Personally I've started allocating less to BTC and more into the alts on a weekly basis. May look bad at the moment, but when the trend changes, it's gonna look great! Thanks for the share!
That could certainly happen. It happened last year. Bitcoin running should bring new money into the space which likely will ultimately help altcoins at some point as money flows from bitcoin to other projects when its run slows.
This is exactly right - when BTC goes up and alts go down that is the best possible time to buy alts. BTC is the way that most of the money comes into the system, and the traders sell alts and into BTC before that happens causing alts to go down. Then after the money comes into BTC and the price is much higher, they trade back into alts causing a BTC consolidation and a rise in alts.
I have generally been selling over the course of 2018, but now I am a buyer of STEEM (and probably some other alts too)!
my bulwark and gin are holding steady. masternodes 4 lyfe
Ah yes, the microcap altcoins... some of those aren't getting hit as hard.
also XPTX - staking like a beast too
If BTC continues to Rally; Steem will not be far behind. 💰🤑💰
If Bitcoin is moving then alt-coins will definitely move up sooner or later...BTC movement is the key, which is happening now... so, enjoy the ride and buy favourite alt's on dips....
That strategy has certainly paid off before. Several times last year in fact.
Very true!
@jrcornel hello 👋 sir,,,,,,, That's right, altcoin's condition is very bad, all of us have not been waiting for that, I think bitcoin is responsible for all this, since 2018 February we all thought altcoin would give a good profit in June, but now July is going to end but now the market's condition is very bad, I think altcoin may come down further until bitcoin is stable, but I think 2018 last, 2019 first, ekbar altcoin us 2019 First of all, altcoin will benefit us ??? Must say that by commenting
Upvote comments follow,
Bitcoin is still the best crypto around. Maybe in a few years there will be a competitor but not yet.
This was a very informative blog about what’s been going on with the surge of bitcoin and how it’s been effecting Steem as well. I hope that we see strong growth in the future with Steem, as bitcoin is on the rise. I do realize this isn’t always the case though but I have high hopes for the steemit platform because of the ideas behind it. Thank you for sharing this info with us. Take care!
I'd like to see steem move up a few places on the marketcap list, currently around 38th. LIke to see it in the top 20 coins.
That would be great if it moved up there. I can see it getting there since there’s so many other sites and programs that are built on the block chain. Not to mention all the new users we’ve been getting. We’re a lot further than we were a year ago.
Yep, though when steem first launched, it was a top 5 coin. We have fallen a long ways in that regard.
I couldn't agree with you more. I just hope that when BTC truly starts to pump that it will usher in a true altseason.
It may, especially if it brings in a bunch of outside money like it did at the end of 2017.
Thanks! I was wondering about this... I dumped a couple of altcoins I didn't have a lot of faith in and put it back into BTC. My rule of thumb is to watch how LTC does against BTC to see which way the other alts will do. If LTC goes up along with BTC, the others usually follow.
Good observation. The market pretty much seems to in two waves. There is bitcoin, and then everything else.
I think people who have invested in crypto are still bit afraid to loose their money if it falls again. So, many are trying to have a short term gain. Resulting in dip again.
That is some of it too. Sentiment is still pretty bad, takes a bit to reverse that.
I think it will take more than just a bit.