Bitcoin (BTC) price has remained in the area for a few weeks now, but traders usually expect a slow fourth quarter to get the best digital assets.
In 2018 and 2019, the fourth quarter ended in a distinct negative way, which reinforced the bearish trend in the market. In the short term, a dull fourth quarter of further drop in Bitcoin’s price could lead to further drops in altcoin prices.
For now, many technical analysts are closely watching the return of the Bitcoin dominance index to warn of a pullback in the altcoin market.
Is the worst over for alternative currencies?
According to a Cointelegraph report, most of the micro-digital currencies and decentralized finance (DeFi) digital currencies have fallen by 30-60% in the past two weeks.
The drop in altcoins worsened as Bitcoin rose from $ 9,981 to $ 11,179 between September 9-19, and it appears that a profit was made during that period. Analysts believe that profits from altcoins and DeFi are being converted to bitcoin and stablecoins.
Thus, while Bitcoin had a strong bullish trend, DeFi coins fell and altcoins continued to decline steadily.
Altcoin sales occurred as Bitcoin began to decline after deviating from the major resistance level of $ 11,100. Over the past fifteen days, BTC is down roughly 6%, settling above $ 10,500.
According to Cointelegraph contributor Michael Van de Pope, the current downturn likely won’t end soon.
In his tweet, Van de Pope posted the following chart and explained that Q4 crypto markets usually have “boring and corrective” phases. Historically, Ether hit a bottom in December and started moving into the next quarter, according to traders.
Van de Poppe predicted that “the dominance of BTC will grow with an alternate season in the first quarter of 2020.”
A trader under a pseudonym known as “Loma” supported a similar view. He said that the last time altcoins fell hard, BTC plunged hard in a short time.
Altcoins are declining this time, while BTC and Ether remain relatively stable above their respective support levels. Dealer Note:
“Everything is inundated at the moment, and Bitcoin barely moves. The last time I saw it, Bitcoin pulled an intense light downwards.”
Is a savings meeting expected?
Since the beginning of October, the cryptocurrency market has faced a number of negative developments that may affect investor sentiment.
On September 26, the KuCoin exchange was breached for $ 281 million, and although the bitcoin price was not corrected among the news, this could have prevented the bullish momentum building up. Then, the United States Commodity Futures Trading Commission (CFTC) announced that on October 1, BitMEX was accused of violating bank secrecy.
On October 2, US President Donald Trump tested positive for COVID-19, causing an uproar in both the traditional markets and digital currencies.
After several major events, investors are looking for increased volatility, and some traders have suggested that a short squeeze may be at stake.
Another popular crypto trader on Twitter, known as the “Byzantine General,” said this is the “perfect” moment for short journalism, as it would relax weak hands. The trader also indicated that he believes there is a lot of third-party capital in the cryptocurrency market. He said:
“Now that uncertainty reigns, especially in the cryptocurrency space, this will be the perfect moment to burst and leave all weak hands behind. By the way, the SSR is still historically low, which means there’s a lot of dry powder on the sidelines.”
Overall, traders are expecting a boring quarter for bitcoin and altcoins, but the heavy selling last month could ultimately lead to a solid rally.