Altseason Ain’t Out of the Game Just Yet

by Bruce Ng
By Bruce Ng

There’s no shortage of fear, uncertainty and doubt in the market right now. 

Understandable, considering how fast Bitcoin (BTC, “A”) fell off its new high near $73,700 to roughly $63,000 at the time of writing. 

When crypto drops like this, they tend to do it in large bursts until strong support is found. If BTC continues to dump, we expect $62,000 and $61,000 to be strong levels of support.  

So, what does this mean for the bull market? 

Answer: It depends on what BTC does from here.

If support at $60,000 can hold, then we can expect Bitcoin to trade sideways for the next few weeks. 

But if BTC continues to drop below $60,000, this means this rally is way overheated, mostly due to ETF inflows. That will likely result in a deep correction and multi-month depression of prices. 

That said, we can assume some parameters if a deeper correction is on the table. 

Bitcoin was trading near $41,000 when the BTC ETFs began trading. It is highly unlikely that BTC will retrace all the way there. 

Between these two possible futures, I believe the first to be more likely.  

Why?

Because Bitcoin’s halving is anticipated to take place on April 23. And while it may not send prices soaring immediately, that cut in available supply will eventually hit against the still rising demand from the ETFs. 

And that would be great news for altcoins because …

A Sideways Bitcoin Means Opportunity for Alts

I said last week that we need BTC to continue ceding market dominance before we can expect an altseason. 

Well, when we look at Bitcoin dominance, it is holding up well. 

Figure 1:BTC.D on the 1W. Click here to see full-sized image.

 

This is to be expected as when BTC dips, alts dip more. 

That means funds flow back into BTC … though not enough to push prices up. 

So, what does this mean for altseason?

Right now, it’s on an indefinite hold. 

But if that first scenario from earlier unfolds — if Bitcoin can hold local support and consolidate — then any sideways action in the lead up to the BTC halving would give altcoins a chance to run.

Even better, cyptokoryo’s altcoin buy signal is showing something interesting …   

Figure 2: cryptokoryo’s altcoin buy signal. Source: cryptokoryo. Click here to see full-sized image.

 

I initially introduced this indicator a few weeks ago. It shows when it’s a once-in-a-lifetime chance to buy (low on the chart) all the way to when you should sell (top of the chart).  

The thin, yellow line above signifies the altcoin market — all cryptos except for Bitcoin. And according to cryptokoryo’s indicator, we are close to great buying levels for alts once again as that line is almost touching the bottom of the chart. 

If you still think as I do, that there is more room for this bull to run, then this is a good opportunity to load up on your favorite altcoins. 

But you should note that alts are incredibly volatile. Most have already dropped 20% across the board but corrections as steep as 50% from recent all-time highs aren’t out of the question. 

As my colleague Marija Matić explained yesterday, Bitcoin has historically dipped as far as 40% in the lead up to the halving. And alts correct harder. 

So, there is certainly risk when buying in this market, especially if you’re only looking at short-term gains. But if you’re considering longer investments, the risk/reward ratio skews more on the reward side.  

And if you’re looking for ways to adjust that ratio even further in your favor, I suggest checking out my New Crypto Wonders newsletter. 

Together with Juan Villaverde, we target the best growth opportunities in the top sectors leading the market. And we use Juan’s Crypto Timing Model to determine the best time to act, sending you specific “buy” and “sell” alerts.

If you want to learn more, click here.

And keep your eye on your inbox for more information in the coming weeks. 

Best,

Dr. Bruce Ng

About the Contributor

Dr. Bruce Ng is a literal rocket scientist who was among the first to write about DeFi. Today he applies the same mathematics and scientific methods to the crypto space to discover the world’s most promising, and potentially most profitable, altcoins.

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