Bitcoin (BTC) dominance remains high at 66.3% and so does the amount of attention traders are dedicating to the largest digital asset’s price action.
Last week’s move from $7,800 to $8,850 will have further entranced investors, and the hope of breaking above $10,000 may have distracted some traders from noticing the awakening that has occurred with many altcoins.
As reported by Cointelegraph, a growing number of altcoins have posted impressive gains as Bitcoin consolidates and it appears the trend is set to continue. For some traders, this is a welcome change of events.
Bitcoin’s multi-month consolidation in a giant descending wedge led altcoins to defy trader’s common logic and the majority of altcoins continued to drop to new lows instead of rallying.
A likely explainer of this scenario is that:
- Many traders still have burned fingers from attempting to take altcoin positions throughout 2018.
- Altcoins sharply decreased in value as Bitcoin made a parabolic move from $4,000 to $13,800.
- Altcoin’s continued to drop in value as Bitcoin consolidated from Jun. 26 until Sept. 22 and traders appeared reluctant to take up positions in altcoins as previous market cycles showed that strong upside moves from Bitcoin led to a drop in altcoin prices. The same occurred when Bitcoin’s price dropped.
It seems that the most recent drop from $10,300 to a multi-month low at $7,700 served as a signal to invest in altcoins. Some traders have found confirming evidence in comparing Bitcoin and altcoin fractals to identify bottoming patterns and the possibility of future rallies.
Others recall 2018 when Bitcoin traded in the $6k range for many months before dropping to $3,200 in November as the Bitcoin Cash hard fork took place.
Bitcoin’s recent price action in the $10k to $9k range might have led some traders to predict that a drop below $8,000 might eventually bring the digital asset back to the $6k range.
While this has yet to occur, the drop from $10,300 to $7,800 has given traders enough confidence to begin taking positions in altcoins.
Will Ether kick off a new altcoin season?
Given that Ether (ETH) is the largest altcoin by market cap, it seems reasonable to look to the asset as an indicator of how other large-cap altcoins might perform.
Last week Heath Tabert, the chairman of the United States Commodity Futures Trading Commission (CFTC) said that he believes Ether is a commodity and Tabert suggested that Ether futures trading would soon become a reality. BKCM CEO Brian Kelly also believes that the classification is highly bullish for Ether and Kelly said…
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