Bitcoin (BTC) has given us some signs of hope the last few days but we have seen comparatively more energy in altcoins. This is because as historical cycles indicate, we are at the brink of an altcoin rally. The daily chart above for BTC/USD shows that Bitcoin (BTC) is all set for a break out but temporarily faces a 21 Day EMA resistance. It is unlikely to be broken over the weekend as volume will be low and market makers might want to have one last go at accumulation before letting Bitcoin (BTC) loose to begin a new trend. Since January 2018, Bitcoin (BTC) has been trading in large triangle which is eventually supposed to be broken either to the upside or to the downside.
Technical indicators at this point, including the MACD diagram for the above chart point to a trend reversal for Bitcoin (BTC). However, that does not mean that Bitcoin (BTC) is expected to skyrocket from here. It will take its time to break out of the triangle and will then follow a pattern of slow but steady growth till the altcoin rally concludes. Most cryptocurrencies have now reached their historical lows against Bitcoin (BTC). Some are at the brink of a trend reversal while others have already begun new trends against Bitcoin (BTC). If those altcoins are to reach new all time highs, Bitcoin (BTC) will have to rise from current levels and proceed towards its previous ATH of $20,000.
The probability of Bitcoin (BTC) surpassing the $20,000 mark by a big margin still remains low. Our previous studies indicate that even if Bitcoin (BTC) continues to climb in a sluggish manner, it can still reach a price of $22,000 or close. Altcoins on the other hand will have more aggressive movements compared to Bitcoin (BTC). Yesterday’s price movement in altcoins gave us a solid reminder as to how the green days used to be in the cryptocurrency space. Ethereum (ETH) was up nearly 12% and most altcoins followed suit. The growth slowed down as investors still fear one final wave of capitulation over the weekend.
The long term trend is clear though as Bitcoin (BTC) and altcoins have followed these cycles over and over again. The monthly chart above for BTC/USD shows how Bitcoin (BTC) rallied between Nov 2011 and Nov 2013. During this period, most altcoins suffered as money flowed from altcoins to Bitcoin (BTC). The suffering continued during the correction that followed but between Nov 2013 and January 2017, it was the time to accumulate altcoins. Those who accumulated on time profited enormously as altcoin cycles are expected to be more abrupt and unpredictable compared to that of Bitcoin (BTC).
Between January and December of 2017, it was a good time to be long on Bitcoin (BTC) as the BTC rally had begun. Altcoins also received a boost in prices with growth in Bitcoin (BTC) during late 2017. The market entered a correction in early 2018 which was completed in August. We are now on the verge of an altcoin rally same as before which would see altcoins gaining against Bitcoin (BTC) most likely till May 2019. After that, money will initially flow out of altcoins into Bitcoin (BTC) but later with a rising Bitcoin (BTC), altcoins will complete their second rally just like the one during late 2017.