Market Analysis: Is a Great ALTCOIN Winter coming?
Brrrrr....
Something interesting happened today. Bitcoin went up 5.34% in fiat value while lots of altcoins bit the dust, losing both fiat...
...and BTC value; here in Ethereum:
...and in Litecoin:
See, during this Spring's altcoin bubble, altcoins' BTC and fiat value became correlated to BTC and started to increase together with BTC as Bitcoin was gaining in fiat value.
Here in Steem:
As I explained in this article though, this wasn't always the case.
Before the bubble, most altcoins were inversely correlated to BTC so that their BTC value would decrease everytime BTC would gain fiat value. This price action characterized the crypto markets for most of 2015 and 2016.
BTC/altcoins inverse correlation in Litecoin on the larger time frame
As I stated above, it now seems like the altcoin market is once again losing its correlation to Bitcoin.
Here's my analysis why:
last Spring's altcoin bubble was fueled by the FUD around Bitcoin's fundamentals, talks of a network disruption added to the ICO-mania led a lot of new money to buy into altcoins, hopeful they were investing into the next Bitcoin (Ethereum to the MOONN, Litecoin to the MOOON, ETC to the MOOON.... we heard it all);
now with the altcoin/ICO bubble seemingly over, Segwit about to deployed on the Bitcoin network and the prospect of the Lightning network, Bitcoin fundamentals are stronger than ever and confidence in Bitcoin might lead many to dump their altcoins for Bitcoin;
a massive Bitcoin bull-run could be extremely damaging for the altcoin market if altcoins were to lose their correlation to Bitcoin (in terms of their BTC value) because it could spell the beginning of an altcoin bear-trend;
if we're true to form, an altcoin bear-trend could last for months and lead to more dumping as the last of the dumb money is shaken out of the market and this would eventually affect altcoins' fiat value;
on top of this, there is further incentive to buy back into BTC because on August 1st anybody holding BTC will get to receive free Bitcoin cash (BCC) which currently trades at $217 a pop on futures market;
Bitcoin cash is not your typical garbage altcoin, it is supported by Jihan Wu, head of Bitmain (aka one of the biggest Bitcoin miners in the industry) and Roger Ver (aka the ex-future President of Bitcoin), these people are massive players in the Bitcoin market and could very well pump the price of BCC next month while attempting to crash the price of BTC to create FUD.
So here's my plan:
I've converted most of my altcoins into Bitcoin which I'll keep on my Ledger to receive my free BCC;
I am going to transfer cash onto some liquid exchanges to scoop up some cheap BTC if the price crashes because of some whales' shenanigans;
Finally, I am going to hold on to my BCC, possibly buy more if the price crashes and wait for the pump, which I am sure will come eventually.
PS: shout out to @octet for this smart strategy: you can also leave some BTC on exchanges to scoop up cheap altcoins before they recover after the fork.
And you, what is your plan for August 1st?
#cryptocurrency #bitcoin #steemit #steem
Trade safe guys, and please follow and upvote if you like the content.
Dan @tradealert
Nice post. Upvoted and following you. Please do the same for me. Thank you.
THanks @bikash-tutor, I'll have a look at your content soon :)
Good plan, thanks Dan
My pleasure @gdreyer, go check out my older content and follow if you like what you see :)
Great analysis. Looking forward. :)
Resteeming.
Much appreciated @nikudutta, feel free to follow if you like the stuff!
Following.. 😃😃👍👍
Welcome on board @nikudutta!!
People are converting altcoins to BTC just to have "Free money" with BCC, and get back their altcoins. But what if BCC dumps in a couple of minutes/seconds with bots and whales ?
No free money, and people will go back to altcoins.
So my strategy is to convert to BTC until July 31th, then buy altcoins so cheap and enjoy the pump on 1st August
Hi @octet, it's very possible that BCC dumps into the gutter on day one, however you don't have to panic sell your BCC at the bottom like everybody else. The smart play here is to hold your BCC through the dump (or buy more), wait for BCC to recover and pump (and most altcoins pump eventually) to sell your BCC for BTC. Alternatively you can hold BCC for a long time. Look at what happened to ETC after it split from ETH: ETC dumped to almost nothing on price discovery and pumped over 5000% the next day, it's all in the charts :)
Yes you're right, it's possible, nothing ins impossible with crypto. But I believe that BCC will be worthless, and some of my strong altcoins won't disapear in "near" future, so I take the bet to not get BCC and invest only in cheap altcoins :)
As long as you have a plan you'll be fine!
PS: I had a good thought about your strategy and it convinced me let some of my BTC on exchanges to scoop up cheap altcoins, I also included your strategy in my post with a link to your profile, hope you don't mind, smart play mate:)
Nice one Dan, i love people who have a plan :-). My plan will be same as my plan of the last 5 years, do absolutely nothing and see what happens. I am one of the lucky ones who got my btc long long time ago and never regretted my strategy :-). But please let me know if you really think this would be stupid now...
Awsome @bubke, I commend you for holding through all this. I think BTC fundamentals are looking very good right now with Segwit and the future Lightning network so holding is still a great strategy. Its folks like me who got in BTC at a higher price who need to grind hard to squeeze some more BTC out of the market haha!