why the Altcoins are not growing following the BTC
When Bitcoin exceeded the psychological mark of $10,000, many analysts started talking about the arrival of the bulls into the crypto market. Traditionally, during the rally after the BTC, the altcoins also try to catch up. However, this time something went wrong.
The capitalisation of the cryptocurrency market has exceeded $ 300 billion, of which 65% is concentrated in Bitcoin, the remaining 35% — in 2,265 different altcoins. Usually, all movements in the market are determined by the prime cryptocurrency. When BTC grows, other coins follow it. And when its price goes down, the cost of altcoins falls behind it.
Correlation of BTC and Altcoins
However, this time only Bitcoin shows positive dynamics. Investors have forgotten about other coins. Although compared with January 2019, the capitalisation of altcoins went up.
In a blog on Medium, a user with the nickname CryptOrangutang writes that the correlation between the BTC course and altcoin has changed. If earlier these two markets were growing and falling at the same time, now Bitcoin volatility in any direction means painful changes for the rest of the market.
“The current correlation has been fairly steady over the past few weeks or even months: bullish BTC = bearish altcoin market,” he writes.
Why alts are not growing
One of the reasons why the altcoins are not showing explosive growth is that coins enter a period of accumulation that will last until 2020. In any case, the cryptanalyst with the nickname Moon Overlord on Twitter is sure of that. In his opinion, only after that their cost will probably go up.
Changpen Zhao, the CEO of Binance, the largest crypto exchange also believes that the time of the “alts” hasn’t come yet. According to him, even though the potential of Bitcoin is still far from being exhausted, it has already taken its toll from the market and soon the altcoin season will return.
At the same time, according to Vadim Popov, a specialist in the field of cryptocurrency, now the altcoins are not interested in anyone, since all the attention of traders and investors is focused on the BTC.
“Altcoins are not growing, because now Bitcoin is a market driver, and so far nobody is interested in alts. Later on this interest may return — when the growth of Bitcoin and its attempts to take a new maximum will become less obvious, the growth cannot continue indefinitely,” the expert says.
Moreover, according to him, the market will sooner or later “run out of steam,” and perhaps right now we are seeing the first symptoms of that happening. And as soon as speculators understand that this horse is tired, they will happily move into the altcoins, believes the expert.
Who needs altcoins
According to a well-known cryptanalyst Tony Weiss, it will be possible to talk about the real arrival of bulls at crypto market only when “all altcoins die”.
And coins die only when they stop being listed at the stock exchange. However, even now you can find an exchanger where the Bitconnect crypto pyramid token is being traded.
As for the need for alternative coins, according to Vadim Popov, 95% of altcoins are rubbish that soon will not cost anything.
“Only coins with a clear application for solving specific problems, such as anonymization, will survive. And today, it seems to me that in reality there will be a maximum of ten alts on the market, for the rest there is simply no need. All those Bitcoin forks, all ethereum competitors are all just a potential garbage that has accumulated some points of value during the hype, behind of which there is nothing more than just pure greed,” claims the specialist.
Bitcoin-developer Jimmy Song does not recommend to add to the investment portfolio any altcoins as well. Because in order to realistically assess the advantage of coins, it is necessary to understand the code, and very often it does not represent anything.
Therefore, when the Altcoins will shoot up — rather a rhetorical question. It is possible that the coins did indeed have moved into the period of accumulation and show their growth in 2020, when investors finally lose interest in Bitcoin.
Author: Annabella Lapshina
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Published at Sat, 13 Jul 2019 07:11:34 +0000
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