Why Bitcoin price and volume rising together is bad news for Ethereum, altseason

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Bitcoin (BTC) is sucking up the volume from your entire cryptocurrency market because it continues to rally. This is inflicting the choice cryptocurrency (altcoin) market to pullback, which has seen rising promoting strain and low purchaser demand.

On Oct. 30, researchers at Santiment pinpointed the rising volume and dominance of Bitcoin, whereas Chainlink (LINK), Ether (ETH) and Binance Coin (BNB) struggled. They wrote:

“The dominance involving #Bitcoin is persevering with to show itself, notably through buying and selling volume. When evaluating different high blockchains prior to now day, observe the decline in $ETH, $XRP, $LINK, and $BNB buying and selling volume, whereas BTC’s ranges stayed excessive.”

No less than within the foreseeable future, merchants consider the so-called “altseason” is not returning, particularly as Bitcoin outperforms altcoins.

The buying and selling volume of Bitcoin towards different main cryptocurrencies. Supply: Santiment

When would altcoins get better?

Traditionally, throughout bull markets, the cryptocurrency market noticed Bitcoin expertise a fast uptrend first. Then, altcoins adopted, after BTC surged to a neighborhood peak or an all-time excessive.

Merchants foresee the same sample enjoying out within the present price cycle, usually anticipating altcoins to get better in 2021. However till BTC stabilizes and completes its rally, merchants don’t see a correct altcoin uptrend taking place.

Since Sept. 13 lows, the Bitcoin dominance index has elevated from 56% to 63.four%, recording a 7.four% enhance inside two months.

The Bitcoin dominance index. Supply: CoinMarketCap.com

Nonetheless, Michael van de Poppe, a full-time dealer on the Amsterdam Inventory Alternate, stated an altseason within the first quarter of 2021 is doable. He stated:

“Dominance hit the purple zone right here. Nonetheless ready till December for a high construction on this one. After that -> Quarter 1 altseason.”

The issue with altcoins is the present dynamic of the cryptocurrency market. When Bitcoin rises shortly, altcoins fall as capital cycles again into BTC. If BTC drops, then altcoins drop in tandem, placing altcoins in a precarious place.