Could This Be The Start Of The Alt Season Or Time To Take Profits?
- Historically, chances for an alt-season looks good
- But could it just be an opportunity to avoid becoming a bag holder?
We started the month on a green note, nearly touching $11,000 in less than a week. However, the weekend didn’t turn out to be a good one for the leading cryptocurrency.
First, we dropped to $10,220 on Sept. 6. Though we managed to climb up again to above $10,600, it didn’t take long for BTC to get back to $10,300 level on Sunday.
Now, the week has started on a shaky note as we went to as low as $10,060 on Bitstamp.
At the time of writing, BTC/USD has been trading at $10,450 with 24 hours gains of 0.39% while managing the daily trading volume of $1.27 billion, as per Messari.
Altcoin, as usual, have turned red as well but surprisingly since this weekend, a number of top altcoins are performing better than expected.
Historically, Chances for an Alt-season Looks Good
In 2019, we saw how Bitcoin surged more than 200 per cent but altcoins didn’t make any green candles, except for a few.
Whether the flagship cryptocurrency moved up, down, or traded sideways, altcoin couldn’t do anything but drop and sometimes even harder.
But after the excruciating 2019 so far, as altcoins show some signs of life now, it can’t be helped that investors are getting excited and calling out for an alt-season.
But is it really?
According to market analyst and trader CryptoWolf, if we take a look at the historic BTC and alts market cycle, Bitcoin reversal has front-run alts season which leads to BTC ranging and altcoins surging.
“Alts tend to die while money flows in BTC, especially in reversal rally. Post reversal, BTC tends to range. Only then Alts start following the overall trend, ergo, alt-seasons,”
Alts market cap is at the moment around $60 billion (excluding $ETH).
That is about the same as the market cap for companies such as Sony, Gazprom, Charles Schwab, Glencore, Bayer and Baidu.
And more than BMW, John Deere, Adidas, Fedex, Vodafone, Tesla and Dell.
— Alex Krüger (@krugermacro) September 8, 2019
Or could it Be an Opportunity to Avoid Becoming a bag Holder?
Analyst Willy Woo also took to Twitter to share what does the global alt markets are saying.
Altcoin vs Bitcoin market capitalization is now two weeks into being tested on its 6.5 years support line with weekly RSI being “more oversold than its entire history” and this has been going since July, Woo said.
If the current level fails, he is expecting about 60% drop relative to Bitcoin’s market cap before we found the next area of support.
“Fundamentally, though alts are screaming in pain, these two charts show how they have not yet detoxed from 2017 bubble valuations. Though locally oversold and may see some bounce in coming weeks, longer term, into 2020, I can't see these levels holding (relative to Bitcoin),”
However, unlike bitcoin enthusiasts that are getting “excited with sh*tcoins for the Nth time,” economist and trader Alex Kruger is not at all feeling positive about altcoins because,
“There is zero new money coming into alts. Something to remember if buying in. Take profits to avoid becoming another bagholder.”
Although altcoins have started showing signs of life and historical data says this might be the beginning of alt season, the limited price movement doesn't guarantee that we are at that point yet.
Moving forward, if altcoins are able to hold these gains, we’ll be able to get that confirmation.