Bitcoin’s Price Breakout Could Be the Platform for Major Altcoin Rally
Many have had their eyes glued to Bitcoin as the cryptocurrency has rocketed up in price in a short space of time, reminding many of the days of late 2017 when the BTC rally took it all the way to $20,000.
However, those who witnessed that rally of the major cryptocurrency should also remember that following its cool down, there was a proceeding altcoin rally which saw even bigger gains across some of the other major coins in the market.
One trading analyst on Twitter, Nik Patel, has pointed out an interesting fact by looking back at past altcoin/Bitcoin bear cycles. He has said that in the past, when the markets have dropped as much as 70%, there have been, in the last five cycles, returns of over 600%.
Following the cycles
Patel, the author of the book “An Altcoin Trader’s Handbook”, has explained that while Bitcoin went on to set new yearly highs, altcoins have continued to set new yearly lows in their BTC ratios. The total altcoin market cap drawdown has been 66.5% so far.
However, during the four previous altcoin/Bitcoin bear cycles, all have had an average drawdown of nearly 70% – a mere three and a half percentage points away from current levels. This could indicate that the selling pressure is almost exhausted, and that a new bull cycle could begin.
Couple of fun facts:
– Of the previous 4 ALTBTC bear cycles, the average drawdown has been 69.7%. The current drawdown of this ALTBTC bear cycle is 66.5%.
– The average growth experienced across the past 5 ALTBTC bull cycles was 617%.
— Nik Patel (@cointradernik) 14 May 2019
If this bull market is realised, based on previous history, then it would be expected that the returns made from the altcoin market could top more than 600%, according to Patel.
Patel is not the only one who is looking at the altcoins while everyone watches Bitcoin: a fellow analyst, DonAlt, has a similar outlook, saying he expects altcoins to play catch up once Bitcoin’s surge cools off.
To all the people trying to snipe the Bitcoin top by shorting it:
Have you thought about longing altcoins instead? They’ve been / are capitulating and will very likely explode the moment BTC tops out.
There is more money in that than shorting BTC in my opinion.
— DonAlt (@CryptoDonAlt) 11 May 2019
It also needs to be remembered that the likes of Litecoin and a few other altcoins helped spark off positive sentiment back into the market. While these coins may well have had their time, there were others, like Ethereum and XRP, which lagged at the start of crypto spring.
With Ethereum also soon switching its consensus algorithm in an attempt to upgrade its capacity and potential, there are a few extenuating circumstances that could again help boost the price of altcoins like this, along with the historical rally that is expected by a few traders.