Traders expect a slow fourth quarter for Bitcoin and altcoins, especially as the BTC dominance rate begins to rise.
Why traders expect ‚boredom‘ in Bitcoin Circuit and altcoins price action by 2021
The price of Bitcoin (BTC) was stuck in a range for weeks, but traders usually expect a slow fourth quarter for the highest rated digital asset.
Bitcoin quarterly returns (%).
Bitcoin Revenue per quarter (%).
In 2018 and the 4th quarter of 2019, the net closing was negative, injecting a bit of a downturn in the market. In the short term, a boring fourth quarter of further decline in Bitcoin price may cause altcoin prices to fall further.
At the moment, several technical analysts are closely watching the jump in Bitcoin’s dominance index to warn against a retraction in the altcoin market.
The worst is over for altcoins?
As published by the Cointelegraph, in the last two weeks, most small altcoins and decentralized finance tokens (DeFi) fell by 30% to 60%.
The fall in the altcoins worsened when the Bitcoin rose from $9,981 to $11,179 from September 9-19 and during this period it seems a take-profit rally took place. Analysts believe that the profits from altcoins and DeFi became Bitcoin and stablecoins.
Thus, although Bitcoin saw a strong upward trend, DeFi tokens fell and altcoins remained in constant decline.
The settlement of the altcoin occurred when Bitcoin started to fall after being rejected from a key resistance level of $11,100. In the past 15 days, BTC has fallen almost 6%, stabilizing slightly above $10,500.
BTC/USDT daily chart.
According to Cointelegraph employee Michael van de Poppe, it is unlikely that the current downturn will end anytime soon.
In a tweet, van de Poppe posted the following chart and explained that encryption markets usually see „boring and corrective“ phases during the fourth quarter. Traders said that, historically, Ether will hit bottom in December and start moving next quarter.
BTC/USDT daily chart.
Van de Poppe predicted that „BTC’s dominance will increase, to have a new season in the first quarter of 20201.
A trader with a pseudonym known as „Loma“ expressed a similar feeling. He said that the last time the altcoins fell so much, BTC had a big fall in a short period.
This time, the altcoins are decreasing, while BTC and Ether remain relatively stable above their respective support levels. The trader observed:
„ALTs downloading now while Bitcoin barely moves. The last time I saw this, Bitcoin painted a fat candle. ”
Relief rally in sight?
Since the beginning of October, the cryptomaniac market has faced a series of negative events that may be weighing on investor sentiment.
On September 26, the KuCoin exchange was hacked for $281 million and although the price of Bitcoin has not been corrected with the news, it may be preventing the upward momentum from increasing. The U.S. Commodities Futures Trading Commission (CFTC) then announced that it had accused BitMEX of violating the Banking Secrecy Act on October 1.
Then, on October 2, U.S. President Donald Trump tested positive for COVID-19, causing a stir in the traditional and cryptographic markets.
After several important events, investors expect an increase in volatility and some traders suggested that a little pressure may be on plans.
Another popular trader known as „Bizantyne General“ said that this is the „perfect“ time for a quick squeeze as it would shake weak hands. The trader also gave the impression that, in his opinion, there is a lot of capital on the margin of the cryptomaniac market. He said:
„With all the uncertainty happening now, especially in cryptography, it would be the perfect moment to blow up and leave all the weak hands behind. BTW, SSR is still historically low, which means there’s a lot of dry dust on the side lines. ”
Overall, traders anticipate a dull quarter ahead for Bitcoin and altcoins, but last month’s intense settlement could lead to a strong rebound in relief.