Bitcoin shattered yet another price ceiling as it climbed to $27,800 after putting on an impressive rally which shows no signs of slowing down. The strong momentum has further boosted its dominance in the cryptocurrency market as it hit 70.73%.
What’s Holding back Altcoins?
So what happened to the much-anticipated alt-season? The world’s premier token noted a parabolic rise in terms of its value but the same cannot be said for the altcoins. The total altcoins market cap stagnated after a reluctant surge and has failed to mimic the 2017-like price action. What is causing the delay in the bullish advance?
It is important to understand that one of the crucial factors of Bitcoin ballooning above 70% market dominance was the sell-off triggered in another top altcoin’s market – XRP after the latest Ripple-SEC dispute.
With wild swings on the upside, Bitcoin is bound to face pullbacks. But historically, it was noted that it was during these times of pullbacks in Bitcoin that altcoins suffered extensive corrections. Yet another reason for the underwhelming performance in the altcoin market is Ethereum’s dull price action when compared to Bitcoin.
Ethereum Fails To Steer Way For Alt-Season
While Bitcoin was up by nearly 30% since its 2017 ATH, Ether, on the other hand, was still down by 50%. Some market experts are of the opinion that the “hopium” surrounding the revival of the altcoin market might not see the light of the day. The institutional focus on Bitcoin has been one of the major drivers of its price movement.
This is very much unlike the altcoin market which has been mostly explored by retail investors. This particularly holds true as when BTC extends its rally, there has been a prominent trend of retail investors investing sideways in a bid to increase their exposure to new and established altcoins.
This is what a well-known Bitcoin trader, TheBoot had to say about a potential alt-season:
“I don’t believe alts have viable uses, 99% of them. No, I do not think alts will ever see anything like 2017 again. Remember that $btc dominance would be significantly higher if not the never-ending altcoin supply increase. Index-based $btc dominance would be higher”
It can be inferred that institutional investors have so far sidestepped altcoins. Adding to the market woes, was the uncertainty over the pandemic which led to the economy spur investments into Bitcoin. This has led to a delay in the much-awaited alt-season. It is only plausible that during these turbulent times, investors are placing their money on a safer bet, i.e Bitcoin and its counterpart will have to wait to gain a prominent foothold.