Bitcoin Over 6,000 – The Twilight Of Altcoins?
The price of Bitcoin reached 6,100 USD last week, price not seen for almost six months. That’s the good news. The bad news is, Steem is not really moving forward, seems to be stuck by approximately 0,34 USD.
Steem/Bitcoin (Chart: Coinranking)
But there are some other changes in the air. In 2017 and 2018, Bitcoin and most cryptocurrencies were heading in the same direction. When Bitcoin rose, its alternatives, the “altcoins” rose as well. In addition, they rose much more than their big brother. Later, during the huge fall of prices, Bitcoin was followed by the others. Most of the major players in the altcoin-market have also overtaken the great predecessor in the downtrend.
Not following the leader
Following the leader, the Bitcoin, which has approximately 56 percent weight in the capitalization of all cryprocurrencies, and falling even more than the first crypto. (See here: Is Steem A Large Cap, Or A Mid Cap Cryptocurrency?)
Tron/Bitcoin (Chart: Coinranking)
But this seems to change these weeks, maybe big part of this year. Not all altcoins are following Bitcoin right now. As you can see on the charts, not only the Steem/BTC price, also the Ether/BTC, the Tron/BTC, the XRP/BTC, the EOS/BTC is on, or at least near one-year lows. (Litecoin, not, it is much higher.) And this prices seem to be moving all in downtrend. So, in reality, all these cryptos are underperforming, not only Steem.
Ether/Bitcoin (Chart: Coinranking)
The cow of the neighbor
Three men who died recently are brought before the throne of God and told that they may each have one wish. The Briton asks for an end to war. The American asks for an end to hunger. The Russian smiles slyly and says, “In my village, I have a neighbor who has a cow. I do not have a cow. I wish that my neighbor’s cow shall sicken and die.” (Source)
Shall we be glad that others are in trouble, too? Certainly, not. I think the most important task should be understand what is happening and why. Read what explanations I found for now.
The One Ring
Forbes, for example wrote, citing asset managers:
BTC is so far ahead of any other digital asset in terms of adoption and use cases (…) when Bitcoin is on the rise, there is a general move out of altcoins and into BTC (…) Altseason is over and the market is now consolidating back into Bitcoin
XRP/Bitcoin (Chart: Coinranking)
Nice, but this was all true last year, too. Bitcoin is getting stronger because Bitcoin is stronger? Maybe. For me, that doesn’t explain much from the processes. The current situation reminds me of the 2015-2017 Bitcoin slow recovery, before the huge hype at the end of 2017. Altcoins were not broadly known nor in the center of attention in those old times.
Smart money?
There are signs that large institutional investors, also called “smart money”, could have rebalanced their portfolio, increasing Bitcoin stake and dropping some XRP, Ether. At least by Grayscale, a “major crypto fund” manager. (See here.) Maybe this one company can’t change very much the market. But if other asset managers are thinking corresponding to it, that can be a reason for the moves.
Litecoin/Bitcoin (Chart: Coinranking)
I appreciate articles of Victor Dergunov on SeekingAlpha because he is often right. And I also appreciate all attempts to explain the fundamental value of cryptocurrencies. He wrote about a week ago:
The Bitcoin bull market is back, but is still in its very early stages. Bitcoin' s blockchain continues to attract 10s of millions of new accounts, 50% YoY growth. Bitcoin's value is still minuscule relative to alternative assets, including investable gold and fiats. Also, about 99.5% of Bitcoin's applicable market remains untapped.
I suppose the growing number of accounts can trigger a new, stronger bull market. The other facts are here also known from earlier.
(Picture: Own Work, with GIMP G’Mic effects plugin pack.)
Alts had their day during the Altcoin season throughout February and March, now those alt gains are being rotated back into BTC.
This was the standard cycle during the last bullrun, which makes me think that the market cycle has changed (see my post on that subject : https://steemit.com/introduceyourself/@onefreemanwins/introduceyourself-who-i-am-and-why-i-think-it-is-likely-that-the-bear-market-has-ended)
Please note that the 6.100$ BTC price was on Bitfinex only and due to the Tether scare premium.
The price on other exchanges is closer to 5.700, so we have not cleared the significant resistances on the way to 6.100 yet.
One could argue that alot of this pump is people buying up BTC with their Tether on Bitfinex and withdrawing them due to the current uncertainty on that exchange.
My guess is that the major alts will have their day again, the art is in picking up on the change of season early on.
well observed data thank you
Impressive enough that Bitcoin is doing a +15% increase in the last 1 month
Everyone is just loading up on btc to purchase alts, duh! 🤣 yeah not looking good for alt market. If steem sinks any lower its gonna head into a tail spin.
That is really great to hear. Hope steem follows the path
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