For him only Bitcoin (BTC) matters, Altcoins are just scams – it means that I waste my time writing on Ethereum (ETH) or even on Ripple (XRP) ? When times are tough for Bitcoin, the grass is greener on the altcoin side. It’s hard not to take a look at it, just to see if it’s natural or synthetic turf.
Altcoins as consolation prizes
What strategy to adopt when you want to invest in cryptocurrencies? This is THE question many investors new to cryptocurrency ask themselves.
Investors fear a Bitcoin unable to progress 50% from its current price – oscillating between $ 9,000 and $ 10,000 – because of the current context (note : The article was written before the little bull run that saw Bitcoin hit $ 11,000 at the time of publication).
Some therefore turn to the cadets of the BTC : around forty altcoins among the top 50 cryptocurrencies, priced below $ 3.
Altcoiners are hoping for a pump to get a higher return. But hope lives on until statistical analyzes show results that should make these investors think twice, before buying certain altcoins.
Some heads but not all!
Historical analyzes indicate that altcoins gain in value when Bitcoin Loses some, a negative correlation which should therefore be profitable to investors knowing how to switch from dean to cadets at the right time.
Data reported by Cointelegraph allow us to identify 3 periods illustrating this negative correlation, during this year 2020: from January 7, 2020 to January 22, 2020, then from January 30, 2020 to February 14, 2020, and finally, from March 25, 2020 to April 9, 2020.
For example, for the first period, Bitcoin could not exceed the resistance threshold of 9,000 USD; On the altcoin side, the markets saw an increase of around 24%, but only 6 out of 41 cryptocurrencies managed to perform better than the market average.
The scenario repeated itself in March 2020, when the price of Bitcoin : 7 out of 41 altcoins posted above market gains.
Altcoins are therefore an alternative to Bitcoin when the latter is in a gloomy period, however, this observation only applies to a few altcoins that must be carefully selected.
While waiting for the BTC bull run, console yourself with altcoins, but choose your associates carefully. Is Bitcoin Overshadowing Altcoins? Is the reverse or will it be possible in the future?
Litecoin, welcome in the Silver Age