It seems that the long-awaited alt-season may finally have arrived after Bitcoin’s market cap dominance fell from 60% to 55% following strong rallies for a number of prominent altcoins.
With Bitcoin’s dominance falling over 2% in the last few days alone, we have seen breakouts for many top-10 market cap projects. Bitcoin SV, for example, is up over 140% in a week, with other large-cap projects like Ethereum and Litecoin up over 22% and 36% respectively. Over the same time period, Bitcoin saw its own breakout to fresh 2019 highs with a comparatively paltry 15% move to the upside.
Having a bag
Unconventional industry analyst the Crypto Dog has stated that “we haven’t seen nothing yet” until both ETH and BTC “blow the lid on this flag”. His “I have a bag” hashtag appeared to signify that the technical trader is gearing up to sell off some of his alt collection.
For many alt-projects, margin trading is not really an option, so the only way to realise really huge profits would be to ‘buy the dips’ as they come and then plan to sell them off for large gains once the retail investors arrive.
#altseason? Nah, we haven't even seen nothin' yet.
Despite Bitcoin breaking out of its most recent pennant to trade its way up to $9,000, it has since been trading sideways and potentially into a bull-flag formation that is reminiscent of the base it used to spring up from in 2017 – before its year-end parabolic adventure.
Unlike Bitcoin however, Ethereum has seen higher highs over the last 24 hours after rallying from its $260 support to now trade at over $280. Litecoin too has smashed through any remaining resistance at $100 to trade up to $120.
The trickle-down effect
Traditionally, alt-season usually kicks off with BTC rising first, with money then subsequently flowing downwards through large-cap alt-projects and then into a select group of low market cap ‘decentralised’ projects that only have liquidity with other crypto pairs.
Looking at the historical charts for BTC dominance, it’s easy to see that the last time that dominance trended downwards from a similar peak (in December 2017), the move down looked like a parabolic capitulation all the way down to 33%. Chances are we won’t see the same thing play out this time, but if the symbolic 50% dominance fails to hold in the coming weeks, then we may see another shift away from the “It’s only about Bitcoin” narrative that has been building steam in 2019.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.