Bitcoin Dominance and Altcoins Pump Incoming
Bitcoin (BTC) has experienced a slight retracement after surpassing $50,000 earlier this week. While BTC finds its supports and resistances, altcoins present potential opportunities with good risk-reward ratios.
In the world of cryptocurrency trading, altcoins refer to any digital currency that is not Bitcoin and typically exhibits higher volatility. Traders and experts are now discussing their expectations and investment strategies for the altcoin market.
An altcoin rally does not necessarily mean a shift of funds from Bitcoin to other cryptocurrencies. Instead, it is driven by an influx of capital into the overall market, leading to greater price increases in smaller market caps.
Bitcoin Dominance as an Indicator
Bitcoin dominance (BTC.D) serves as a reliable indicator for altseasons when altcoins outperform BTC. Currently, BTC.D stands at around 53.62% of the total market capitalization, which is expected to decrease during an altcoin rally.
Expert trader Cevo anticipates more volatility and an expansion phase for altcoins. However, he warns that pumps and dumps will be more aggressive moving forward, emphasizing the importance of making clear-minded decisions and remaining calm.
The Relationship Between Bitcoin and Altcoins
For altcoins to thrive, Bitcoin must maintain its current levels. If Bitcoin experiences significant retracements, other cryptocurrencies are likely to follow suit, delaying the anticipated expansion phase or altseason.
Investors must prioritize risk management and emotional control in this uncertain and volatile cryptocurrency market. According to Cevo, these characteristics may intensify in 2024.
For a list of altcoins worth watching in 2021, Finbold has published a comprehensive guide featuring cryptocurrencies below $1 billion and $10 billion in market capitalization.
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