Bitcoin Dominance Losing Steam
Despite the fact that Bitcoin is the leading crypto, altcoins, as non-BTC digital assets are known, were all the rage in late-2017 and early-2018. In fact, over the course of the bull run from 2016 to early-2018, Bitcoin dominance fell from over 90% to 33% at the bottom.
This was catalyzed by a Cambrian explosion in the variety of cryptocurrencies, the ICO revolution, and massive growth in older projects like XRP and Ethereum.
But, for much of the recent rally in the Bitcoin price, altcoins have underperformed the market leader, slipping under the pressure of a growing focus on BTC. This loss of strength against the leading cryptocurrency was best encapsulated by the growth of Bitcoin dominance from around 50% to 65% during the time that BTC rallied from $3,150 to $13,000.
However, there may be hope for altcoins. Per a recent analysis of the Bitcoin dominance chart by Benjamin Blunts, an analyst that called in mid-2018 that BTC would bottom around $3,500 (he was right), altcoins may soon outperform. As seen below, he notes that the dominance reading is about to break a key uptrend. Benjamin adds that per his use of Elliot Wave analysis, the one-hour Bitcoin dominance chart is currently in a five-wave decline, implying a move lower in the coming days.
To conclude, he writes to his followers that “you all know what that means”, implying that the fabled altseason, during which non-Bitcoin crypto assets are expected to explode in value, might just be on the horizon.
Not so Fast, Says Altcoin Skeptic
Despite this analysis, there are some traders that don’t expect for altcoins to widely outperform Bitcoin anytime soon.
Peter Brandt said in a recent tweet that the uptrend in Bitcoin dominance could continue, quipping that “crypto maniacs” who believe altcoins will “benefit from bull runs in Bitcoin… may be very disappointed.” Backing his point, Brandt likens the previous bull run to the Nasdaq’s Dotcom boom and bust, but this surge to the subsequent rally, during which “altcoms” died out and “dotcoms with real value exploded.”
In another analysis, Brandt opined that Ripple’s go-to cryptocurrency, XRP, could drop to $0.16 — 50% of its current U.S. dollar value — should BTC see an “immediate correction”. Such a move would set XRP’s market capitalization to $7 billion, which is what it was trading well over a year ago.
Brandt seems to be backing this pseudo-call by noting that XRP against the Dollar is currently trading in somewhat of a wedge, which has held for around 9 months. Should that wedge fail to the downside, the cryptocurrency may not be in for a good time, that’s for sure. It is unclear where the $0.16 figure was derived from though.
Just a pertinent aside, Brandt has generally bearish on altcoins, recently telling a number of outlets that he wouldn’t be surprised to see 95% (if not more) of non-Bitcoin crypto assets fail with time. He has expressed some relatively optimistic thoughts towards Litecoin and Monero, but that’s about it.
Photo by Steve Johnson on Unsplash
