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Here’s why altcoin investors should be wary, despite the recent gains
The recent surge in the cryptocurrency market has given altcoin investors a brief glimmer of hope. However, the long-term forces at play make it essential for investors to exercise caution and not get too caught up in the short-term hype.
Firstly, Ethereum’s performance against Bitcoin is a major cause for concern. Despite its recent recovery, the crypto asset remains in a severe downtrend since January, losing 56.6% of its value. This downward trajectory has been accompanied by falling network activity and fees, further reinforcing the bearish outlook.
The falling ETH/BTC ratio, which was near the summer 2019 levels, is not encouraging for investors. It’s a stark reminder that the king of crypto, Bitcoin, continues to hold significant sway over its smaller counterparts. The failure of Ethereum, the largest altcoin in the market, to break above long-term resistance has set off alarm bells.
Furthermore, the rise in Bitcoin Dominance (BTC.D) is another red flag. This metric tracks the share of BTC’s market cap against the entire crypto market cap and has been trending upwards over the past two years. A recent surge in its value above 63.8%, a level that was previously support back in early 2020, now serves as resistance. The fact that it continues to rise suggests that altcoins have bled heavily against BTC.
Moreover, the short-term outlook may be bullish for some altcoins, but long-term trends indicate otherwise. Despite the recent rally, investors should not be swayed by short-term gains alone. It is essential to consider the broader context and avoid being caught off guard when reality bites.
Akashnath S.
Source: https://ambcrypto.com/heres-why-altcoin-investors-should-be-wary-despite-the-recent-gains/
