Bitcoin passed the resistance level of $13,000 just a week ago, which means that those who expect a rise in Ethereum and Altcoin prices may have to wait a few months
The Bitcoin ( BTC ) is sucking the volume out of the entire cryptomino market as it continues to rise. This is causing the altooins market to shrink, which has seen increasing selling pressure and low demand from buyers.
On October 30th, Santiment researchers identified the growing volume and dominance of Bitcoin, while Chainlink ( LINK ), Ether ( ETH ) and Binance Coin ( BNB ) were struggling. They wrote :
„The dominance involving #Bitcoin continues to show itself, mainly through the volume of negotiation. When comparing other major blockchains the previous day, note the decline in trading volume of $ ETH, $ XRP, $ LINK and $ BNB, while BTC levels remained high. ”
For the foreseeable future at least, traders believe that the so-called „altseason“ is not returning, especially as Bitcoin outperforms the altcoins.
When would the altcoins recover?
Historically, during the bullish markets, the market for cryptomorphs has seen Bitcoin experience a rapid upward trend first. Then the altcoins followed, after BTC reached a local or historical peak.
Traders anticipate a similar pattern in the current price cycle, generally expecting the altcoins to recover in 2021. But until BTC stabilizes and completes its bullish run, traders do not see a proper uptrend of the alcohes happening.
Since the lows of 13 September, the Bitcoin’s dominance index has risen from 56% to 63.4%, registering a 7.4% increase in two months.
However, Michael van de Poppe, a full-time broker on the Amsterdam Stock Exchange, said another season in the first quarter of 2021 is possible. He said:
„Dominance has hit the red zone here. I am still waiting until December for a top structure in this one. After that -> 1st quarter this season. ”
The problem with altcoins is the current dynamics of the cryptomino market. When Bitcoin rises quickly, the altcoins fall as the capital returns to the BTC. If the BTC falls, the altcoins fall together, putting the altcoins in a precarious position.
A trader’s alias known as „DonAlt“ said it has been sold on Ether for several days. He said that if ETH does not recover against Bitcoin, then a broader withdrawal from the altcoin market is a possibility. The trader noted :
„I’ve been short of ETH for a few days. That said, ETHBTC is approaching support. Therefore, there is a good chance that it will jump here, if not, the whole altcoin market will drop quite aggressively. ”
Similarly, one trader recognised as „CryptoCapo“ said that the technical structure of altcoins is not attractive in the short term. For traders, this makes Bitcoin more attractive, as it portrayed a strong momentum throughout October. He stressed :
„Let’s be honest: there are alts that look really bad, alts that look decent and alts that look good. I don’t see any altcoin that look very good now. Choose wisely“.
The key is for the Bitcoin rally to cool off
As long as the price of Bitcoin continues to rise rapidly and Ether falls behind, a new season of altcoins is highly unlikely in the short term.
A strong sign of another season would be the consolidation of the ongoing Bitcoin rally, followed by a break in the price of ETH.
Considering the BTC/USD has breached the $13,000 resistance level just a week ago, technically an uptrend in the Ether and altcoins market could still potentially be several months earlier.
So far, capital in the altcoin market still appears to be shifting to the Bitcoin. As the Cointelegraph reported, the decentralized exchanges, or DEXs, continued to bleed in October. This indicates that demand for DeFi tokens is probably decreasing due to the current timing of Bitcoin.