Last night, Bitcoin broke back above $6,000 across the crypto market, and to many, it’s a signal that the bottom is “in” and the bear market is now a lingering memory.
While the leading cryptocurrency by market cap has nearly doubled since its 2018 low, the rest of the crypto market continues to bleed out, with most altcoins setting new lows in their ratios relative to BTC. With Bitcoin at an inflection point, and much of the market in disbelief, analysts are torn as to whether altcoins like Ethereum and Ripple will continue to plummet, or are an attractive buy at this level.
Crypto Investors Focused on Altcoins Continue to Be Swatted By Bears
In a recent Twitter poll, it was revealed that the average large majority of crypto investors are diversified across two to nine coins, which may or may not include Bitcoin. Only 16 percent of crypto investors responding to the poll claimed to be holding only Bitcoin, suggesting that only a small subset of crypto investors have experienced relief during the current Bitcoin rally.
While Bitcoin has nearly doubled in value since its 2018 low, altcoins have continued to suffer relative to their price in BTC. Much of the altcoin market is paired with BTC on exchanges, causing Bitcoin to have a powerful impact on the price of these other crypto assets.
Prior to Bitcoin breaking through $4,200 at the start of the April rally, altcoin growth had been closely correlated with the first ever cryptocurrency. Many were calling for an “alt season” – a period where altcoins experience extreme growth relative to BTC.
However, following that break of resistance, altcoins have been decimated through an inverse relationship with Bitcoin. The relationship between BTC and altcoins is fickle, with alts sometimes pumping when Bitcoin grows, and other times dumping violently while Bitcoin climbs.
The promise of alt season now has become a running joke across the crypto industry. However, such a decoupling may be a healthy sign for the crypto market, as YouTube personality Tone Vays and crypto entrepreneur Vinny Lingham say it is needed for a full blown Bitcoin bull run to begin once again.
Will Altcoins Set New Lows Or Rebound if Bitcoin Can Hold $6K?
As many altcoins, such as Ethereum, Ripple, and Stellar reach new lows in their BTC ratios, analysts are torn if these price levels present a strong buying opportunity, or are due to set even more extreme lows.
Bitcoin dominance is now at an 18-month high, and a rebound across the altcoin market is expected if Bitcoin can hold at levels around $6,000. Should Bitcoin fall further, it could cause most altcoins to fall off a cliff and see their ratios relative to BTC plummet further.
If altcoins do rebound, they have a lot of catching up to do if crypto investors that aren’t Bitcoin maximalists are ever to get some relief.