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Bitcoin (BTC) is sucking volume out of the entire cryptocurrency market as it continues to grow. This is causing a pullback in the alternative cryptocurrency (altcoin) market, which has seen increased selling pressure and low demand from buyers.
On October 30, Santiment researchers spotted Bitcoin’s growing volume and dominance, while Chainlink (LINK), Ether (ETH) and Binance Coin (BNB) struggled. They he wrote:
“The domain involving #Bitcoin continues to manifest itself, particularly via trading volume. When comparing other major blockchains on the last day, notice the drop in trading volume of $ ETH, $ XRP, $ LINK and $ BNB, while BTC levels remained high “.
At least in the foreseeable future, traders believe the so-called “altseason” is not coming back, especially as Bitcoin outperforms altcoins.
When would altcoins recover?
Historically, during bull markets, the cryptocurrency market first saw Bitcoin experience a rapid uptrend. Then, altcoins followed, after BTC reached a local high or an all-time high.
Traders are expecting a similar trend in the current price cycle, generally expecting altcoins to recover in 2021. But until BTC stabilizes and completes its rally, traders don’t see a real bullish trend in altcoins. .
From the lows of September 13, the Bitcoin dominance index rose from 56% to 63.4%, registering a 7.4% increase within two months.
However, Michael van de Poppe, a full-time trader on the Amsterdam Stock Exchange, said an altseason is possible in the first quarter of 2021. He She said:
“Domination has hit the red zone here. I am still waiting until December for a superior property on this one. After that -> Fourth 1 altseason “.
The problem with altcoins is the current dynamics of the cryptocurrency market. When Bitcoin rises rapidly, the altcoins decrease as the capital returns to BTC. If BTC falls, altcoins fall in tandem, putting the altcoins in a precarious position.
A pseudonymous trader known as “DonAlt” said he was short on Ether for several days. He said that if ETH doesn’t bounce back against Bitcoin, then a larger withdrawal of the altcoin market is possible. The dealer noticed:
“I’ve been short on ETH for a couple of days now. That said, ETHBTC is getting closer to support. So there is a good chance it will rebound here, if not the entire altcoin market falls aggressively enough. “
Similarly, a trader recognized as “CryptoCapo” stated that the technical structure of altcoins is not convincing in the short term. For traders, this makes Bitcoin more attractive, as it represented strong momentum throughout October. He underlined:
“Let’s be honest: there are halts that look really bad, halts that look decent, and halts that look good. I don’t see any altcoins that look really good right now. Choose wisely. “
The key is for the Bitcoin rally to cool down
As long as the price of Bitcoin continues to rise rapidly and Ether lags behind, an altseason is highly unlikely in the short term.
A strong signal of an altseason would be a consolidation of the ongoing Bitcoin rally followed by a breakout in the price of ETH.
Considering that BTC / USD broke through the $ 13,000 resistance level just a week ago, technically, an uptrend in the Ether and altcoin market could still be several months away.
So far, however, the capital in the altcoin market still appears to be shifting towards Bitcoin. As Cointelegraph reported, decentralized exchanges, or DEXs, continued to lose volume in October. This indicates that the demand for DeFi tokens is slowing likely due to the current momentum of Bitcoin.
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