Bitcoin has usually remained to be the driver for the entire crypto market in the past. Once the asset rises up, the rest of the cryptos usually rally up behinds it and same is the case when it drops. But now, things are showing up to be a little different as bitcoin is seen shooting up.
Well-renowned trader and analyst, Luke Martin, tweeted the following picture stating:
$BTC pumping & alts dumping visualized. Generally speaking most alts had positive corr with Bitcoin’s moves for the past 5-6 months. Relationship changed right after the $1k $BTC breakout. *cc of $ETH, $LOOM, and $VET used as an example*
The recent breakout has signified a reversal in the conventional trend followed by cryptos. Although this can be termed as an anomalous behavior, Thomas Lee recently pointed out a very important detail hidden beneath it.
Since 2015, one of the “pre-conditions” for the start of alt-season is a drop in the correlation between Alts and $BTC
Over the past few years, the negative correlation with bitcoin and altcoins has signified the upcoming of a major altcoin season. As it is being shown again, it is likely that an altcoin season might just be around the corner. This highlights that you might want to HODL those altcoins of yours for a while. But right now, bitcoin is attracting all the spotlights of the crypto world due to its extreme price spike being witnessed since the beginning of this month.
Volatility is something that is associated with the crypto world since its beginning. Nothing can be said regarding prices of the crypto assets with utmost surety. The only thing that has remained certain regarding these assets is uncertainty. Since the market capitalization is also pretty small as compared to huge financial organizations, the crypto space is often exploited by big whales roaming around. Pump-and-dump strategies, meaning buying and selling of crypto assets in large numbers to exploit the price fluctuations in one’s own favor, are used by such entities.
Although volatility is undesirable for the proponents of bitcoin if this digital asset is to gain a status of worldwide currency replacing the traditional fiat, it is also the thing that attracts traders and investors in this space who are looking to gain a quick buck by trading volatile cryptos. For bitcoin, the bullish wave has hit and the asset is growing consistently in terms of its price while for altcoins, things are just getting heated up if the past data is to be believed. For altcoins, it will be interesting to see whether exciting times lie ahead or not, keeping in mind there is a possibility of an altcoin season incoming.