Bitcoin is currently pulling value from altcoins as it breaks through long term resistance levels
You may have noticed that Bitcoin is rallying nicely today, but altcoins are struggling to get off the ground...
Bitcoin is breaking out of a long term downtrend as well as some horizontal resistance, which you might think is good for crypto as a whole right?
Not so fast...
There is a phenomenon in crypto affectionately known as the "Bitcoin Suck".
It's a situation where bitcoin runs up at the expense of the altcoins.
Bitcoin "sucks" value from the altcoin market as it surges higher.
(Source: https://www.coinbase.com/price/bitcoin)
But wait, I thought bitcoin going up was a good thing for altcoins?
It is, but sometimes not in the near term.
As mentioned above, sometimes when bitcoin starts running, and it usually happens when bitcoin starts moving up in big chunks as opposed to more "normalized" price action, value in altcoins tends to chase the bitcoin returns.
As bitcoin climbs higher, and money begins to chase those returns, altcoins fall out of bed.
It's not a fun time to be an altcoin holder...
However, there is light at the end of the tunnel...
Thinking about the bitcoin suck and the possibility that the run in bitcoin is just getting started, it may give you some bad feelings about holding your altcoins...
Let those bad feelings go.
There is an old saying in crypto...
"Bitcoin first, and then the altcoins"
Which basically means that bitcoin tends to outperform first, pull value from everywhere and go on a nice run, but then altcoins eventually join the party as well.
(Source:
)https://twitter.com/888Velvet/status/1258353667331284994
- 888Velvet
It happens when new money tries to chase the returns in bitcoin by catching the 'next bitcoin'.
And it happens as people lock in their bitcoin gains by moving to altcoins.
The interesting part if you are an altcoin holder is that these cycles have yielded even bigger returns in altcoins than those holding bitcoin during the initial bitcoin surge...
Things like bitcoin running up 40%, bitcoiners rejoicing, only to have altcoins then run up 100-200% and altcoin investors getting the last laugh, is quite common.
So, if you are missing out on the party right now, try not to worry too much, there is a decent chance you will get your day in the sun soon enough.
Stay informed my friends.
-Doc