Bitcoin has dominated the cryptocurrency market for the majority of 2019, but as we approach the end of the year, many analysts are predicting the altcoin market could soon surge in value.
The past 12 months have been largely positive for Bitcoin, with the price an impressive 126% higher (in US dollar terms) than it was at the beginning of the year, thanks to a strong rally that kicked off in April.
Most altcoins, however, have struggled in comparison. Ethereum is currently just 33% up from the start of the year, while Ripple (XRP) is down 28%, according to CoinMarketCap data.
Theories have been flying left, right, and centre that an alt-season could be just around the corner, but so far, this has failed to come to fruition.
Now, however, there are signs things could be about to change.
One of the key indicators suggesting we could be in line for an altcoin rally in 2020 is a fall in Bitcoin dominance. The Bitcoin Dominance Index is a metric traders use to get an insight into Bitcoin’s value relative to that of the broader digital currency market. Provided by CoinMarketCap, it measures Bitcoin’s market capitalisation compared to the overall crypto market.
Many analysts believe falls in Bitcoin dominance, combined with drops in Bitcoin’s price, act as a strong indicator for altcoin gains. Since the end of 2018, Bitcoin dominance has grown from 30% to more than 60% and, at its peak, neared 70% this quarter.
Now, however, Bitcoin dominance has dropped to 66% and its price has also fallen.
An analyst called Beastlyorion recently tweeted that Bitcoin’s dominance of the overall crypto market is testing support at around 66%. If it breaks, he expects altcoins to “rally harder than you ever could have imagined”.
Altcoin market reaches its bottom
The Bitcoin dominance theory is backed up by claims from other crypto analysts that long-term charts suggest the total altcoin market has bottomed out.
Although 2019 started with both Bitcoin and altcoins steadily climbing higher, this changed in April when Bitcoin started to soar in value while altcoins plummeted.
Crypto analyst CryptoThies, who recently shared a chart on Twitter showing the total crypto market cap minus Bitcoin, believes Heikin-Ashi candles suggest altcoins will soon witness volatility in an upward direction.
The chart implies indicators are turning upward, with volume rising, Bitcoin dominance falling, and a Relative Strength Index head and shoulders pattern that favours altcoin buyers. The head and shoulders formation indicates that altcoins will soon trend higher and outperform Bitcoin for a sustained period.
“HA Candles showing low-volatility period for alts coming to an end,” CryptoThies tweeted.
“See the low range on the two most recent green candles? Think of a taut rope before it snaps. On the flip side, $BTC.D looks less than bull. Check out the RSI H&S. Alt Bottom is in.”
Additional evidence in favour of an altcoin rally in 2020 comes from crypto trader Moon Overlord, who in July claimed altcoins were entering an accumulation period.
This theory was based on a comparison of Bitcoin’s performance against the dollar in 2012-2015 with altcoins’ market performance between 2016 and 2019. Moon Overlord said the accumulation period will likely last until 2020, after which altcoins should increase in value.
Others believe quality altcoins could start catching up with Bitcoin soon in line with historical trends. In October 2017, for instance, Bitcoin was outperforming other cryptocurrencies following a market-wide crypto price correction. In December, Bitcoin’s market share crashed and altcoins boomed.
No one really knows if and when an altcoin rally will kick off. Some analysts argue we won’t see any more alt-seasons because Bitcoin is likely to kill altcoins off as it rises in value and surpasses the $100,000 mark.
Others believe most altcoins are showing indications of a breakout – the analyst Mitoshi Kaku has suggested this will happen in March or April 2020.
Only time will tell which theory is correct, but the next six to 12 months could prove to be an exciting period for altcoin enthusiasts.
The post Why people are holding out for an altcoin rally in 2020 appeared first on Coin Rivet.