The ‘Worst is Yet to Come’ for Altcoins as Capitulation Expected Soon
Post halving, the price of bitcoin has surged more than 10%. However, cryptocurrencies with small-cap have been leading after surpassing bitcoin last week. The Small Cap Index is up about 10% so far.
The Large Caps Index continues to run behind which is also reflected in the market capitalization dominance this week with most coins losing their shares. From Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH) to XRP, Litecoin (LTC), and Dash all saw a small decline in their share.
Mid-cap cryptos fared the worst and are still in red this month, down 1%. This index has been struggling since the beginning of May.
When Alt Season?
After making several attempts to take over $10,000, Bitcoin has found a place under $9,500, for now.
A drop in BTC price means altcoins are also boring right now. Top cryptocurrencies are in the mix while small-cap altcoins like Electronium (+64%), Hyperion (+11.61%) are enjoying gains while DigiByte (+7%), Ethereum Classic (+3.88%), Maker (+3.10%), and Hedge Trade (+2.34%) are also recording some greens.
According to trader SalsaTekila, altcoins will continue to capitulate in the coming couple of months. If during this time, bitcoin surged to new highs, it would set the stage for alt season.
“I hope BTC keeps mooning while ALTS capitulate in the next few months because that would be the perfect conditions for altseason. If bitcoin breaches ATH media coverage will give crypto a lot of visibility and retail newcomers just love owning 10 gazillions XRP over 1 BTC…”
But this also means altcoins will feel more pain in the coming months as analyst Pentoshi also sees the alt market getting ready to “capitulate soon.”
“Seems like the worst is yet to come but afterwards should provide huge opportunities,” he said.
Ether is currently heading for levels not seen since 2016 while Litecoin is trading below 2014-2016 prices and XRP is heading for levels from 2014, 2016, and 2017. Pentoshi said,
“If BTC breaks out and heads towards 10.5k. Have some absolute stink bids on alts. If we see the 19′ highs soon. Alts will likely be lower than you could have ever dreamed of. Holders, or people over exposed will unfortunately likely be in more pain than at any point in 3 years.”
Most of Bitcoin Investors End up in Altcoins
A recent report from Coinbase revealed that while bitcoin is a dominant cryptocurrency, the customers of the exchange show a relative preference to altcoins as well. It reads,
“Bitcoin’s position as the blue-chip asset has remained unchallenged. That said, we do see a trend where bull markets show increasing traction among alternative assets.”
Customers with at least five purchases, 60% of them start with bitcoin but only 24% stick exclusively to bitcoin. More than 75% of Coinbase customers eventually buy other crypto assets.
The reason for the same is largely psychological — winning investments. As seen in the 2017 bull run, with over 1,300% returns Bitcoin was the 14th largest gainer.
The winner of the bull run was XRP with 36,000% gains followed by NEM (29,800%), Ardor (16,800%), Stellar (14,400%), and Dash (9,200%).
However, during the market crash as fear grips the market as seen in 2018 and 2019, “a flight to crypto safety drove Bitcoin back to the forefront.”
source: bitcoinexchangeguide.com
