With a few exceptions, Bitcoin has rallied in recent weeks – as have some altcoins. Ethereum rose more than 100% from the $ 88 lows in March, while XRP almost doubled and exceeded $ 0.20 after the token dropped to $ 0.115 during Black Thursday crash.
Analysts are now saying: Bitcoin could soon begin to diverge from these altcoins if market conditions move in favor of the benchmark cryptocurrency.
Bitcoin is ready to leave altcoins behind
Josh Olszewicz, a cryptanalyst at Brave New Coin, observed on May 15 that Bitcoin’s dominance chart printed a textbook signal of strength: a golden cross.
As Investopedia describes, there is a golden cross when a “relatively short-term moving average is above a long-term moving average”, often followed by a “bullish breakout”.
In this case, according to Olszewicz, the 50-day moving average crosses over the 200-day moving average of the Bitcoin dominance chart – and that shows what percentage of the crypto market consists of BTC. The arrival of the golden cross, the analyst postulated, is a sign that those who are waiting for an “altcoin season” may be disappointed.
Earlier golden crosses on Bitcoin’s dominance chart preceded massive rallies of Bitcoin against Altcoins, suggesting the same thing is likely to happen again.
– Display –
Olszewicz’s analysis has been confirmed by senior technical analysts at Blockfyre, a crypto research company. The said last week that “Altcoins will really fight” and have “maximum pain” ahead.
“ETH is heading for levels that have not been seen since 2016. LTC trading below 2014-2016 prices. XRP is heading for 2014, 2016 and 2017 levels. The old market looks like it may soon surrender. It looks like the worst is yet to come, but there should be tremendous opportunities after that. ”
In a recent comment, the analyst adds that the short-term outlook for non-Bitcoin cryptocurrencies is bearish.
Fundamental data complete the thesis
Bloomberg Intelligence’s chief commodity analyst Mike McGlone also believes Bitcoin is about to outperform its competition.
In the report entitled “Bloomberg Crypto Outlook,” Mike McGlone points out that the ongoing macroeconomic environment “will maintain the performance of first-born crypto against its brothers.”
The remark refers to the fact that while many cryptocurrencies may be “decentralized”, not all of them have the absolute scarcity feature that gives Bitcoin much of its value.
Billion-dollar macro hedge fund investor Paul Tudor Jones has demonstrated this story well in his report titled “Big Currency Inflation”.
He doesn’t criticize altcoins. However, in the report, Jones shows that in a world where fiat money is devalued, Bitcoin is extremely powerful because it is the only viable investment that is mathematically scarce:
“I also advocated owning Bitcoin, the quintessential scarcity premium. It is literally the only large tradable asset in the world for which a fixed maximum offer is known.
– Display –
–
:strip_exif()/i/2002704984.jpeg?resize=150%2C150&ssl=1)