Bitcoin price has rallied back above USD 11,000 today and is currently trying to hold. The incredibly bullish price action after a renewed resistance test turned support could have given bulls the confidence to push the cryptocurrency price much higher.
But as the bullish momentum in Bitcoin builds, altcoins have turned bearish. According to a crypto analyst, alts are “in trouble” regardless of which direction the very first cryptocurrency takes the next step.
Analyst: Bitcoin is bullish, but ready to ‘Rekt’ Alts no matter which route it takes
Bitcoin has been the top-performing mainstream asset of 2020, beating stocks, gold, and just about everything else. Digging deeper into the crypto space, 2020 was all about altcoins.
Ethereum outperformed Bitcoin by a huge margin, while DeFi tokens, Chainlink, and several small-cap altcoins easily outperformed BTC’s ROI.
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But suddenly the tides have turned. After a controversial sale of a founder of ‘food’ token in the DeFi space, the rose-colored glasses have come off.
Even DeFi “darlings” Chainlink, Yearn.Finance and Binance have fallen as Bitcoin has recovered from a drop to $ 10,000 for users.
BTCUSD Versus "Total 2 CryptoCap" Altcoin Market Cap | Source: TradingView
Examining the differences between Bitcoin’s weekly price chart and altcoin’s total market cap reveals a striking difference that could be responsible for the top crypto assets being bullish than alts.
Bitcoin is currently in the process of retesting the downward resistance that has turned into support while the altcoin market’s downward trend line is well below. Altcoins could have overheated too soon after the outbreak, that resistance was never confirmed as support.
However it may be, a crypto analyst and investor says “alts are in trouble” no matter where Bitcoin is headed. But with how bullish Bitcoin has been, the direction is likely going up.
Currently $ BTC looks bullish, so in trouble.
If $ BTC pumps, alts in trouble.
If $ BTC landfills, alts in trouble.
– Koroush AK (@KoroushAK) September 16, 2020
BTC dominance could hit its highest point since Crypto Bubble
If altcoins are indeed in trouble, it is due to a huge head and shoulders pattern confirming on the BTC dominance chart. Bitcoin dominance takes the market cap of the highest cryptocurrency and balances it against all the altcoins in the space.
Related reading | How one rule in Bitcoin dominance gets in the way of peak season
At its lowest point, BTC’s dominance reached 35% and at its peak last year it reached 72%. However, if the pattern confirms, a target of 83% dominance or higher is possible.
BTC.D Bitcoin Dominance Weekly Market Structure | Source: TradingView
Coinciding with this “throwback” iteration test of resistance altered support, which we know BTCUSD is a critical situation, there has also been an outbreak of a bullish falling wedge pattern.
The bullish breakout is very similar to that previous breakout that took BTC.D to 72% in 2019. That year, as in 2020, altcoins led Bitcoin to visit highs again, but then the leading cryptocurrency left altcoins behind and drained significantly.
With BTC’s dominance showing similar signs, Bitcoin looks bullish as the analyst claims, alts could be in a world of trouble.
Featured image from DepositPhotos, Charts from TradingView