Unprecedented Bitcoin Rally Leads Altcoins Into “Uncharted Territory”
The shocking Bitcoin rally has resulted in the cryptocurrency reaching two times its previous all-time high. Meanwhile, most altcoins have yet to return to the high they set years ago. This strange occurrence recently with altcoins growing in USD value, but getting hammered on BTC pairs has led the market into “uncharted territory,” according to one crypto analyst.
Will Bitcoin continue to completely dominate altcoins from here on out, or will a proper altcoin season arrive where the rest of the asset class beats out BTC by a wide margin?
The Bitcoin Bull Run That Left Altcoins Behind
All eyes are on Bitcoin, stretching from Wall Street to Main Street, and even the government and banks are finally paying attention. Hard-coded rarity is causing a supply shock and letting the cryptocurrency soar to new highs with relative ease.
No one is selling BTC, only buying. The investor fever and flying high prices have caused many to turn to cheaper cryptocurrency altcoin alternatives, like Ethereum, Chainlink, and Litecoin.
Related Reading | Bitcoin Dominance Doji: Why 2021 Could Spell Doom For Altcoins
These assets have also been rocketing in USD value, but these altcoins on their BTC pairs tell a very different story.
On USD pairs of major altcoins, an uptrend and price appreciation is visible. However, on BTC trading pairs, each asset continues to grind towards new lows.
In the past, once Bitcoin broke its former all-time high, an altcoin season caused the crypto class to beat out BTC by a substantial amount. But history has yet to repeat during this cycle as is evident in the Bitcoin dominance chart below.
Things are not at all playing out like they did the last time around in crypto | Source: CRYPTOCAP-BTC on TradingView.com
The current altcoin uptrend is nothing like what has been witnessed in the past in crypto. One crypto analyst paying close attention to this strange divergence between the closely related crypto assets says that this is “uncharted territory” for the market.
But what exactly could this mean? Bitcoin so heavily outperforming everything else could be due to institutions only focusing on the top cryptocurrency during this cycle. This wealth class is looking to BTC to offset the risk of inflation, meanwhile, altcoins only present added risk considering their history and limited use case sans a few outliers.
Ethereum has the green light from regulators and will be among the few coins with long-term value. DeFi that’s built on ETH’s back, will also do well. But what do altcoins from the past cycle that have done little to bring a working product to the market have to offer institutional money this time around?
Retail investors who bought altcoins during the last bull run are still at a loss. So who exactly is buying altcoins? And is it enough to reach new highs?
Featured image from Deposit Photos, Charts from TradingView.com