The bitcoin bull market is here, the asset is trading at nearly $ 30,000, and a terrible year has just ended – investors have the right to party and have some fun with their winnings. But an altcoin, which recently shot up immediately, was repulsed and traced almost the entire move.
Speculation suggests a pump and dump group behind the surprise move, but there could be another factor that could hang as a dark cloud over altcoins for many months.
FUN is over: Altcoin is experiencing “brutal” pumping and dumping against Bitcoin
Bitcoin rose from a low of $ 3,800 in 2020 to $ 29,000 at the end of the year. A bull market is back for the top crypto asset and investors are watching the possible breakout of altcoins in the rest of the market.
For example, Ethereum is trading at roughly 50% of its previous all-time high, while Bitcoin is 50% above its high. The divergence has some shark-like investors looking for the right opportunity amid the blood.
Related reading | Bitcoin Dominance Doji: Why 2021 could mean fate for altcoins
Certain altcoins have structures that appear ready for a breakout against BTC, and an altcoin from the last bull run did just that.
FunFair (FUN), an altcoin for the online casino industry, saw a huge surge over Bitcoin. The altcoin rose up to 350% over BTC over the course of several hours.
In just an hour, however, the entire rally was retraced, leading the crypto community to speculate on whether pump and dump groups have returned to crypto. These groups coordinate efforts to artificially pump the price of a coin and only discard it when FOMO is sufficiently ignited.
They were hugely popular at the height of the crypto bubble in 2017 and could be back. Or could it be a sign of something else?
Pumping and emptying? Or has a whale finished all the fun? | Source: FUNBTC on TradingView.com
The other side of the coin: Older crypto assets face a wave of sellers on their way back
While it might very well be fun and play for a pump-and-dump group, a “whale call” alerting users to a huge sum of SPUN tokens that could be moved could have alerted anyone to the upcoming dump .
The fact that such a large supply has been postponed suggests that this was not the action of a pump and dump group, but rather a whale selling the first sign of a major rally in the altcoin.
Related reading | Analyst: Post Bitcoin, traditional finances are pouring into DeFi, not Ethereum
With altcoins still so low and the asset class potentially at greater risk as the SEC starts tightening regulations, whales in the water could be waiting and ready to liquidate their tokens as soon as possible.
Most of the altcoin investors who got in around 2017 are still underwater and might be waiting to sell as soon as they can, even if they are just swapping for bitcoin. It could be the main reason why no alt season has returned and the short-lived ones have only been kept for DeFi tokens and other new alts over the summer.
Featured image from deposit photos, charts from TradingView.com