Continued Bitcoin Correction Could Cause Lead to Altcoin Market Double Bottom
The start of 2019 saw Bitcoin, altcoins, and the total crypto market cap all reaching their “bottom,” and have all since risen USD in value by 100% or more. But at the start of April, Bitcoin continued to rally while altcoins have only bled out and capitulated, falling most sharply in their ratios against Bitcoin.
Bitcoin has now begun to correct, yet altcoins haven’t regained any lost ground and instead have only fallen further. One crypto analyst believes that sustained correction in Bitcoin could cause the altcoin market to double-bottom, suggesting altcoins will retest previous lows not seen since the start of the year.
Altcoin Double-Bottom Ahead if Bitcoin Correction Continues
Ever since Bitcoin reached $13,800 it has been struggling to regain the bullish momentum that caused a parabolic rally out of bear market lows. The leading crypto asset by market cap has been on a strong climb since early April, that’s devoured all of the capital in the crypto market, causing crypto investors to dump their alt holdings into Bitcoin in fear of missing out on the bull run ahead.
Related Reading | Altcoins May Never Again Reach All-Time High, Even if Bitcoin Hits $100K
But since it started correcting, altcoins have failed to recapture any lost value, and are only dropping further. Crypto analyst Dave the Wave, in his latest analysis, has shared a chart comparing Bitcoin price action alongside the altcoin market cap.
If BTC continued to correct, alts could easily double bottom. pic.twitter.com/fmAiYj4VAW
— dave the wave (@davthewave) August 9, 2019
The two price lines show a clear divergence in momentum, with the altcoin market cap beginning to tilt downward, while Bitcoin points upward and is starting to show some indecision.
If momentum and sell pressure continues to push altcoins to the downside, the analyst says that “alts could easily double bottom.”
Alt Gains Now At Parity With BTC, Total Market Cap to Correct
Making matters worse, the total crypto market cap which includes both Bitcoin and altcoins, appears to be forming a head and shoulders top – a bearish reversal pattern which if confirmed would also confirm the analyst’s theory of a double bottom.
Related Reading | Crypto Analyst: Potential 50% Drop Could Put Altcoins on Flash Sale
Considering the sentiment around altcoins versus Bitcoin, the alternative digital assets would be the likeliest candidate to suffer the most additional correction. This would also fall in line with other analyst theories, such as the long-term altcoin market cap “channel” showing another 50% drop ahead, before any chance of an “alt season” occurring.
After a massive run up, possible H&S forming on Total Market Cap…. pic.twitter.com/xQ9hNEPy4I
— dave the wave (@davthewave) August 8, 2019
Many altcoins are still down 90% or more from their previous all-time highs, and may never reach another all-time high even if Bitcoin reaches $100,000. Dave the Wave also shared another chart, depicting how the crypto hype bubble finally inflating has brought Bitcoin and altcoins back to “parity” in terms of returns, with each market reaching over 1000x in gains.
Since April 2017 [when the spike in Crypto really got going], BTC has come back to 'parity' with the alts. BTC and the alt market cap are both showing gains of just over 1000%. pic.twitter.com/EjKspBo2V6
— dave the wave (@davthewave) August 9, 2019
When considering the fundamental value of Bitcoin, versus a market of crypto assets that have little-to-no use case, are 90% below their all-time highs, and the sentiment is in the gutter, further drop from “parity” with Bitcoin doesn’t seem surprising.
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Tony Spilotro, Khareem Sudlow
