2021 will be just the beginning for altcoins. Altcoins have already made huge strides in the first quarter, but if they repeat the steps of 2017, hodlers can expect a 27,000% rise.
Traders note that at the beginning of 2017, the altcoin market capitalization confirmed its previous all-time high as support and grew by 27,623% over the year, now the same scenario is being repeated.
And therefore, as trader Rekt Capital suggested, we can expect insane growth by the end of 2021. But is it possible?
The rise in the dominance of altcoins doesn’t mean that they will grow exclusively
The forecast for the dizzying growth of altcoins came after the largest altcoin – Ethereum (ETH) – broke the important barrier of $ 3 thousand and continued to update all-time highs.
Over the past two months, the market capitalization of altcoins has grown by 119%. Ethereum and many other large-cap altcoins have outperformed Bitcoin in terms of weekly gains, and analysts are predicting new record highs to hit elsewhere.
Dogecoin (DOGE) was especially distinguished, which in 7 days rose by 80% relative to BTC. The third most important cryptocurrency, Binance Coin (BNB), surpassed Bitcoin by 20% and surpassed the $ 100 billion market capitalization level.
At the same time, the dominance of Bitcoin is at a minimum, but the growth of the dominance of altcoins doesn’t mean that they will grow exclusively!
The low share of Bitcoin in the market suggests that investors are willing to take risks, as they transfer part of their funds to riskier altcoins.
This often happens in a growing market when investors are trying to find more profitable assets than the first cryptocurrency. At the same time, during a decline, the opposite process occurs. Since altcoins almost always lose much more on drawdowns in the cryptocurrency market than BTC.
Although it is quite clear that at the moment, alternative digital currencies have significantly surpassed the first ever cryptocurrency. And a significant portion of Bitcoin’s recent gains are spilling over into other cryptocurrencies.
Analysts explain that the prerequisite for a leap up is almost always a negative correlation between the price movement of Bitcoin and all other coins. The current market situation strongly resembles the start of the 2017 bull run.
With institutional investors entering the market, Bitcoin has risen in price and has become expensive for most retail investors. Now the market has “taken a breather” and investors have switched to altcoins. And so far, altcoins have passed only a small part of the possible growth. Experts point out that altcoins are poised to outperform Bitcoin.
It is very difficult to predict the rise or fall of the altcoin exchange rate specifically. But you can follow the main factors affecting quotes, apply the methods of technical analysis. All this will help to compose an approximate scenario for the development of events.
It should be noted that those coins that are associated with decentralized trading platforms will grow. Since the greatest interest at the moment is riveted to the DeFi sector.
Negative news on Bitcoin put pressure on the entire digital asset market. It should be noted, however, that Bitcoin is still the center of the crypto space in many ways. In the long term, this situation is unlikely to change.