Tom Lee of Fundstrat Global Advisors says that the altcoin bull market will return again.
Bitcoin has been enjoying some time in the sun lately with prices up close to 50% from their lows seen in June.
Normally that would mean that altcoin prices would be up even more off their lows as their price moves tend to exaggerate the moves of bitcoin.
At least that has been the trend currently.
However, another trend also tends to show itself from time to time when bitcoin is rallying, and that trend is where altcoins get sold to fuel a rally in bitcoin.
In fact, we saw that happen several times in 2017.
That is the environment we find ourselves in currently.
Altcoins are still sitting mostly near their year-to-date lows while bitcoin has rallied close to 50% in the past few weeks.
What's fueling the bitcoin rally?
Bitcoin has been running hard mostly off of rumors that a bitcoin ETF could actually get approved by the SEC and it could happen as soon as the next few months.
There is also some chatter out of Japan that they may be devaluing their currency (YEN), this also seems to have helped put a bid under bitcoin as a lot of the current bitcoin inflows seem to be denominated in YEN
There is also some technical based buying going on as the chart is finally showing signs of bottoming and flipping to a bullish trend.
All 3 are likely combining to help push bitcoin up, mostly at the expense of the altcoins.
(Source: http://www.wasatchwill.net/2017/02/winter-hike-stewart-falls.html)
However, the altcoin winter may soon be over.
Tom Lee went on CNBC earlier this week and talked about the recent move in bitcoin and the cryptocurrency market as a whole.
A question was levied at him regarding Ether and how it mostly is sitting out the bitcoin rally...
Tom's response was something along the lines of this:
"We wrote about the altcoin market peaking around January 25th, and how we didn't think we would see another major altcoin rally until about mid-August to mid-September at the earliest. However, we do think another altcoin rally is coming."
(paraphrased from what I remember from his CNBC interview)
That would technically make a lot of sense...
Traditionally, bitcoin rallies first and then as the move slows, money starts to flow out of bitcoin and out into the altcoins, causing them to rally.
We saw this play out in late 2017 when bitcoin rallied hard while altcoins mostly watched. Then in early 2018, bitcoin struggled, while altcoins literally hit the moon.
That is when steem traded for over $9 per coin...
Conclusions:
Based on past trends and the current environment, it looks like we can expect to see altcoins join in on the fun anytime within the next few months.
Bitcoin may rally first, but altcoins often follow suit.
Which means, most of the pain in the altcoin world is likely behind us, though lower lows are still possible in the very near term.
Stay informed my friends.
Image Source:
https://bitcoinjunkies.space/index.php/2018/07/26/will-the-altcoin-rally-start-soon/
