Why a Trader Is “Cautious” in Longing Altcoins as Bitcoin Pushes $9,600
- Altcoins have seen explosive growth over the past few weeks, but Bitcoin has recently regained the spotlight.
- With BTC and Ethereum (ETH) seemingly poised to begin to trend, investors are hesitant to go long on altcoins.
- Certain altcoins are already seeing harrowing pullbacks, dropping dozens of percent from their local highs established earlier July.
- As of this article’s writing, Bitcoin trades for $9,650 and Ethereum trades for $275. This is far above the prices seen at the start of the week.
Bitcoin and Ethereum seem primed to break out after a multi-month consolidation. The two assets have posted strong gains in the past 72 hours, rallying higher after flatlining. Analysts say that if BTC begins to trend, it is a bad idea to hold altcoins.
If Bitcoin Trends, Don’t Long Altcoins
The head of technical analysis at Blockfyre claims it is a poor idea to long altcoins if Bitcoin and Ethereum begin to trend:
“If $BTC and $ETH start trending. I’d be cautious on longing #ALTS. Especially if this is the start of a new BTC trend upwards. The most likely out come would be alt/btc pair ratios getting drained while BTC moved past 10.5k in that scenario. I also wouldn’t look to fade 1st move.”
His latest comment comes shortly after he said that an altcoin “rage dump” is probable. As reported by Bitcoinist previously, his exact comment was as follows:
“Alts are about to bring the pain. This chart doesn’t miss and hasn’t missed in this entire thread. Alts are going to rage dump across the board 5-15% on the BTC pairs (USD unsure depends on BTC direction). Do with that info what you will.”
Adding to this outlook, the Tom Demark Sequential has printed a buy “9” candle on the one-week chart of the Bitcoin dominance. BTC dominance is the percentage of the crypto market made up of BTC.
The Pullback Has Begun
It seems that the pullback this analyst has been expecting and signals have been forecasting has begun. Below is a screenshot from Coin Market Cap of the worst performing cryptocurrencies over the past 24 hours.
A majority of these tokens that are underperforming are coins that saw surges to multi-year or new all-time highs over the past week.
Take Synthetix Network Token (SNX), for example. The asset recently surged to a new all-time high around $4.00 on the back of venture capital investment and an uptick in overall adoption.
SNX now trades at $3.30, having dropped 10% in the past 24 hours.
Featured Image from Shutterstock Price tags: btcusd, xbtusd, btcusdt Charts from TradingView.com Why a Trader Is "Cautious" in Longing Altcoins as Bitcoin Pushes $9,600