Bitcoin Selloff Might Lead to Altcoin Season: Twitter Analyst
The crypto market crashed yesterday, as Bitcoin and major altcoins marked double-digit losses. A popular crypto analyst on Twitter thinks that this could actually turn out to be positive for altcoins. That’s because Bitcoin holders might see the bearish trend as the beginning of the next “altcoin season”.
Altcoin Season on the Horizon?
According to popular crypto analyst DonAlt, in order for another “altcoin season” to occur, Bitcoin must first experience a substantial decline in its price.
I think the best way to get alt season at this point is a BTC drop that is coupled with an altcoin ratio drop.
That’d scare the shit out of holders, make them capitulate right into the last cycle low (For majors) and open the doors for an altcoin run.— DonAlt (@CryptoDonAlt) August 12, 2019
The post is from August, but it’s applicable today with the recent market crash. We have seen before that when Bitcoin experiences such a decline, altcoins are usually strongly correlated and follow through. In DonAlt’s view, capitulation on the part of holders could help altcoins turn around.
The analyst added that the market always behaves in such a way as to put altcoin holders in maximum pain, before encouraging them to “capitulate away and then be born anew”.
Market Cycles and Year-to-Date Returns
According to a famous graphic illustrating market cycle psychology, such capitulation is a state of mind that follows panic and denial. It typically comes at the end of a previous bull run after a huge decline in price.
With this most recent market crash, it’s easy to forget the massive bull run of 2019. Bitcoin’s price went from $3,700 in January to $14,000 in June. Even after falling to $8,500, the price is still up by 129%.
Some altcoins have seen substantial increases as well. Binance Coin went from $6.19 to $40 and it’s now at $15.5, or a year-to-date increase of 150%. Litecoin started the year at $30, climbed to $142, and is now at $55 (a 85% increase). The second-largest cryptocurrency by market capitalization, Ethereum, started the year at $133, reached $350, and now finds itself at $169, which is a 27% increase.
Conversely, other altcoins are in the red on the year after the recent crash. XRP is down 34% in 2019.
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