The rise of altcoins heralded the plunge of Bitcoin?

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On November 26, Bitcoin plummeted suddenly, from 18913 to a minimum of 17,125, a drop of a thousand dollars. Does the follow-up of altcoins during the rebound supported by Bitcoin some time ago foreshadow this information?

In this round of rebound mainly supported by Bitcoin, many other currencies are also following up at full speed. Does this mean that this benefit will end early?

In the past few months, the crypto market has proven that Bitcoin, as the oldest cryptocurrency, is still the undisputed leader. It is the rebound engine that drives everything, leaving other currencies beyond the reach. The word “encryption” has almost once again become synonymous with Bitcoin alone.

But now, altcoins are fighting back. In the past seven days alone, as long as it is a relatively popular currency, almost all of it has risen faster than Bitcoin. Although Bitcoin “only” rose by less than 15%, Ethereum (ETH), Litecoin (LTC), Polkadot (DOT) and Stellar (XLM) rose by about 30%. In contrast, IOTA (IOTA) rose slightly less than 40%, Cardano (ADA) rose close to 50%, and Ripple (XRP) even reached an incredible 70%.

What is the reason for this? Why are these coins-not other coins soaring? In other words, is this just a way of capital infiltrating into the most diversified currencies after acquiring Bitcoin, rather than randomly selecting old coins? Does the attractiveness of altcoins mean that the pressure of this rebound has been reduced? Because now the fiat currency is no longer Bitcoin, but replaced with altcoins.

Ethereum and other altcoins before the launch of ETH2

At least at the Ethereum level, one can think that this rebound is based on basic data. After all, this second largest cryptocurrency is looking forward to the launch of the Beacon chain in early December. At the same time, of the necessary approximately 524,000 ETH, more than 300,000 ETH has been pledged and deposited. According to this, not only the launch of ETH2 becomes more likely, but also a certain part of ETH can be withdrawn and circulated. After all, 300,000 ETH is only equivalent to 0.3% of all available ETH. (At the time of translation, ETH2.0 has completed the pledge goal)

As far as Cardano is concerned, you will find that its progress in the decentralization of the blockchain and the new cooperation with banks and other companies to bring “blockchain applications” to the market is very slow (or, too slow). For example, for a supply blockchain, after five years of blockchain discussions, it is not particularly novel, but it is still in demand. And is this combination sufficient to justify a price increase of nearly 50%? The project itself is not feasible, but at least the constant news shows that Cardano is very viable. And this may be enough to win in a speculative market that is slowly reaching FOMO.

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The situation with Ripple is very similar. Similarly, we do not have any major positive news about Ripple, but there is still information falling, showing that Ripple Labs is actively exploring. For example, the new version of the wallet XUMM entered the App store, the hard fork of the XRP ledger also introduced smart contracts, and the “Utility fork” will also distribute flare tokens to all Ripple holders. Therefore, even if there are no major breakthroughs, some progress is happening. There is currently no data indicating that Ripple will soon replace Swift, nor is there any evidence that XRP is being used more and more in international transfers. However, in terms of the work Ripple Labs is working on, and the loyalty of Ripple fans on social media, it is enough to make this process explode.

Looking at IOTA again, the situation is no different: the major breakthrough, which is to close the coordinator to achieve the decentralization of the Tangle, has still not been achieved. But for this, the IOTA Foundation has cooperated with RWTH Aachen University, the Fraunhofer Institute and some companies to open up the data market, and won the TM Forum award for digital transformation, and also announced the future of IOTA Part of the architecture, the second phase of Chrysalis has made good progress.

Perhaps these small improvements are not in line with the expectations of the project three years ago, but they are still a sign of vitality. If these simple and refined signs of life are enough to make these coins take off along the trajectory of Bitcoin, then what does it mean for those coins that have not yet been able to enter the accelerated growth field? BCH, BSV, and DASH “not even” achieved 20% profit, while MXR, FIL, NEM or ATOM only had 10% or less profit, much lower than Bitcoin.

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Ripple, despite its disadvantages, is “only minor”

First, some of these currencies showed signs of weakness. For example, BCH got rid of the ABC tax. But for the market, this only means further instability, changes in developer leadership, and an unpredictable roadmap. As a payment method, the popularity of Bitcoin Cash has been faltering as usual, and even Roger Ver and his marketing machine Bitcoin.com seem to be slowly losing momentum.

Similarly, there is BSV: Craig Wright continued to disrupt, but after he tried to prove that he was Satoshi Nakamoto through the judicial system and was beaten with a “black nose and swollen face”, he had to quit. At least he has received less attention than ever in public outside the BSV community. Even Calvin Ayre became quiet. BSV itself has basically stagnated; and the distinctive healthy growth and enthusiasm in 2019 has also disappeared.

Even Dash coins don’t know what to report, and Dashnews.org magazine has no topics to write about. No matter how much people think about it, Dash will not see mass adoption.

Looking at Monero, although it has finally improved slightly, in terms of transaction volume, it is far from becoming an important means of payment. At the same time, Monero is also facing greater resistance than most other cryptocurrencies. For example, it was removed from other platforms such as ShapeShift. This is likely to scare investors, so although Monero has strong technical characteristics, it has not benefited from the current rebound.

In addition, there are many coins worth mentioning. For example, Stellar (XLM) is spreading rapidly in Germany; Polkadot (DOT), Parity developers promise to create interoperability between blockchains through Polkadot; Chainlink (LINK), its oracle is also increasing Needed by DeFi. Of course there are many others, but this is not the content to be discussed.

What does the rise of altcoins mean for current price movements?

After all, we are not a predictor, so we can only speculate here, and in the spirit of good dialectics, put forward the strongest argument for the contradictory alternatives so that the reader can bear the responsibility of choosing.

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On the one hand, the infiltration of funds into altcoins may be a completely normal market mechanism in the crypto market. Investors can enter the market with Bitcoin, just like holding Dax into the stock market, and then start to diversify their investment. One needs time to understand Bitcoin, but more time is needed to familiarize yourself with altcoins, so that at least one investment decision can be made that is not entirely coincidental. From this perspective, the rise of altcoins will be a good sign of stability. The crypto market will also operate as usual. In fact, the current rise in altcoins may mean that the start of the rally is correct.

On the other hand, this is also part of the market’s customary mechanism. Altcoins usually only take off when the rally is over. If nothing more is available on Bitcoin, then greedy, not necessarily smart investors will try to take advantage of altcoins. Especially Ripple, even after the Bitcoin bubble burst, its value has quadrupled. From this perspective, we can regard the rise of altcoins as a signal that the market rebound has ended.

On December 18, 2017, Bitcoin reached an all-time high, nearly $20,000

Ripple removes Bitcoin, and the market value of all coins only reached its peak after about three weeks, that is, January 7, 2018

The choice of altcoins shows the absolute despair of capital. In the context of Defi and ETH2, the rise of Ethereum may be well understood. And without the massive expansion of Bitcoin, it is conceivable. Ripple (XRP), as a cryptocurrency, has not had any major moves this year; at least not in the past month, but it has witnessed a 70% increase in its price. Similarly, Cardano and IOTA are likely to be disappointing after careful analysis. Even though the cooperation and research announcements of the two blockchains are wonderful, they are still far behind their goals and commitments made this week. The violent price fluctuations laid the foundation.

But these are all encrypted currency mechanisms, that is, the basic data of various currencies is far less important than the overall flow of capital, and this flow will inevitably flow from Bitcoin to altcoins, and then slowly back to Bitcoin from altcoins.