It’s no secret that Bitcoin’s recent parabolic rally did little to give Altcoin’s tailwind. Many are seeing devastating losses against BTC as its growth stagnates.
This is not unprecedented as past bull runs have taken a similar path, with BTC leading and rebounding independently of the rest of the market, followed by a capital rotation event with altcoins flying as BTC drifts down or consolidates.
There is a strong possibility that this will happen again in the future, but the only question that remains is how long Bitcoin will bounce back and how high it will go before altcoins can gain momentum.
A venture capitalist believes the market is nearing the point where a rotation from BTC to altcoins will take place.
He notes that Bitcoin sentiment cannot be characterized less than “general greed & fomo” and notes that this could be a symbol of a local high.
He also notes that altcoins have gone through a sheer surrender as their investors chase after the bitcoin rally that usually happens just before these tokens boom.
Bitcoin rally brings altcoin holders into shape
Bitcoin has risen relentlessly for the past few days and weeks, and its rise has surprised even its most loyal followers.
A combination of rising retail demand and institutional demand is the likely suspicion behind this rally, which caused the price to rise from multi-month lows of under $ 10,000 to highs of nearly $ 30,000 set last night.
This rally hasn’t been too friendly for altcoins as most of their BTC trading pairs have declined significantly over the past few months.
This has created a generally negative sentiment regarding altcoins and also sparked some surrender.
VC Claims Altcoins are about to boom
Matt Kaye, crypto-focused venture capitalist at Blockhead Capital, stated in a recent tweet that he is slowly converting his Bitcoin to altcoins, noting that he anticipates an impending flood of capital from BTC to his smaller counterparts.
“I started selling BTC for alts in the past 7 days and will continue to do so. The extreme nature of this period is why. I bet on: – Extreme MRKT positioning – General greed and Fomo – ALTs are owned as holders capitulate to BTC – Cyclical nature of the market. “
When this transition from Bitcoin to Altcoins takes place, it will confirm a trend seen in myriad other Crypto Bulls markets where the strength of Altcoins is inversely correlated with that of BTC.
Featured image from Unsplash. TradingView pricing data.
