A closely followed crypto analyst says that the altcoin market may be in for some pain as Bitcoin (BTC) threatens to steal the show.
Writing in the latest TechnicalRoundup newsletter, the pseudonymous analyst known as DonAlt says that the new launch of the Bitcoin futures exchange-traded fund (ETF) was not a “sell the news” kind of event. Instead, he sees Bitcoin as likely being in the middle of a strong upward move.
[adinserter block="1"]“Overall, our view is that new all-time highs are likely… and that any dips into reclaimed support, specifically the confluent daily and weekly area around $56,000-$58,000, are opportunities to position for new highs.”
With Bitcoin and Etheruem (ETH) on the cusp of all-time highs, DonAlt says he’s not compelled to open any positions in altcoins. He believes that the major crypto assets will lure capital away from the altcoin markets and cause them to bleed out.
“First, if Bitcoin breaks out, we expect a puke in altcoins as holders sell them to catch the move. This will likely cause a liquidation cascade in the short term and set up a really nice mean reversion play for when the Bitcoin breakout stops printing [green candles].
As such, for experienced practitioners, buying the turbonuke in altcoins for a short-term bounce as the liquidations settle is an idea we’re following closely.”
The trader says that altcoins could become more attractive once Bitcoin finishes its breakout and consolidates into a range.
“To summarize, we don’t like altcoins as long as the majors look like they’re going to print big candles (hopefully green ones) at any moment. If they do, altcoins will become attractive either on a post-liquidation bounce basis, or on a larger rotational basis once the dust has settled.
Now is a good time to do your research on coins, ecosystems, compile watch lists, mark levels, etc. in search for some discounts, should the market be so generous.”
You can read DonAlt’s full TechnicalRoundup letter here.
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