The recent “altcoin season” that has played out in the last few days during the Bitcoin downtrend has made traders “cautious” about what might come next. What could possibly be ahead of us that makes crypto traders so fearful is an altcoin-led blow-off top that is sending crypto back down the valleys of a short-term bear phase.
Here are the unique market factors that may prompt the crypto market to proceed with caution.
Careful Crypto Trader: Beware of Possible Blow-Off Top-In Alts
Bitcoin is now trading at $ 35,000 after trying again to surpass $ 40,000 yesterday. $ 5,000 a day worth of candles in either direction is the norm in crypto trading today, but some top analysts and traders haven’t been alarmed by recent price developments.
Related reading | The striking similarities between the Bitcoin Peak 2017 and now
Since the peak of the bull market in 2017, crypto investors have been waiting for an altcoin season to return to huge profits within a few days. Life changing wealth was created and lost as quickly as it arrived.
The spark that triggered this was supposed to be that Bitcoin surpassed $ 20,000, but that feat came and went and it is only now that altcoins are showing up while Bitcoin has started a downtrend. A top crypto trader is “cautious” about a potential “blow-off top” in altcoins. And here’s why.
Chainlink and Polkadot start Bitcoin | to dwarf Source: BTCUSD on TradingView.com
Altcoin season as BTC Drops marked past Crypto Market tops
Crypto trader Johnny Moe is getting closer to the current price movement for crypto for good reason. Bitcoin is on a downtrend while altcoins are skyrocketing. Polkadot was up 75% in two days and Chainlink was just hitting a new all-time high.
Bitcoin and altcoins tend to show an upward trend together. In the few cases in which the two asset types diverged, there was a peak value. Altcoins recently surged alongside Bitcoin as it surged above $ 40,000 and hit new all-time highs, but the recent rally in altcoins is happening as the leading cryptocurrency by market cap declines.
Bitcoin’s rejection at $ 40,000 lately marks its first higher low in the daily timeframe in months. If a lower low is introduced, the cryptocurrency has, by definition, fallen into a downtrend. The altcoin price movement, which continues to fly while Bitcoin dives, could be a repeat of the conditions that caused the 2017 peak.
Related reading | Capital manager: Ethereum will double in two weeks once ATH is broken
If this is indeed the top it could be bad for Bitcoin, but altcoins could still have two weeks of momentum and profit before the bubble hits and the rest of the crypto market turns around.
Is this trader rightly cautious? Or is PTSD getting the best of them in the bear market and this recent “downtrend” is just another opportunity to buy the dip?
Featured image from Pixabay, charts from TradingView.com