- Altcoins are currently lagging far behind Bitcoin, which is in the process of showing the markets why it is king
- The benchmark cryptocurrency’s rally has provided tailwinds for other altcoins, but they have yet to reach parity with the momentum currently being seen by BTC
- One trader spoke about this in a recent tweet, explaining that he is now watching for there to be a capital rotation event out of Bitcoin and into altcoins
- He notes that there is already signs of this taking place, including a sharp decline seen by Bitcoin overnight giving way for an Ethereum rally
Bitcoin has been taking the lead over the entire market today, with the cryptocurrency’s price rallying past $20,000 yesterday and seeing parabolic gains today while altcoins mostly stagnate.
Where it trends in the mid-term will undoubtedly depend largely on whether or not it can maintain its present strength, as any “blow-off top” could prove to be dire for its price action.
One trader believes that the cryptocurrency’s near-term trend will govern that of altcoins, noting that a price drop seen by BTC could actually be advantageous for altcoins.
Bitcoin Rally Sucks the Oxygen Out of the Room
At the time of writing, Bitcoin is trading up over 8% at its current price of $23,150. This marks a massive surge from its recent lows of $17,600 set just a few days ago.
The selling pressure seen at $20,000 was significant, but the clean break above allowed BTC to enter what appears to be price discovery mode.
Altcoins have stagnated mostly, seeing gains that are well below those seen by the benchmark crypto.
Altcoins May Soon See a Flood of Capital
One trader explained in a recent tweet that altcoins are likely to see a massive capital flood soon as investors rotate out of Bitcoin.
He pointed to Ethereum’s 8% surge seen in the time directly after Bitcoin peaked at highs of $23,700, saying:
“ETH just pumped 8% as BTC dumped. Big for alts. Capital rotation.”
Image Courtesy of Livercoin. Source: BTCUSD / ETHUSD on TradingView.
If this trend persists, then Bitcoin price declines could actually become bullish catalysts for altcoins in the near-term.
Featured image from Unsplash. Charts from TradingView.