DonAlt Warns That Altcoins Might Take A Hit, As Bitcoin Gets All The Attention
According to a popular, pseudonymous crypto analyst known as DonAlt, altcoin market could soon be bleeding as money flows move to Bitcoin (BTC).
In his latest TechnicalRoundup newsletter, DonAlt argues that the recent approval of the Bitcoin futures exchange-traded fund (ETF) was not a “sell the news” -type event. Instead, he predicted Bitcoin to be in the middle of a strong bull run. Bitcoin closed in on all-time high earlier and touched $64,434.
“Overall, our view is that new all-time highs are likely… and that any dips into reclaimed support, specifically the confluent daily and weekly area around $56,000-$58,000, are opportunities to position for new highs.”
With the two leading crypto assets Bitcoin and Ethereum (ETH) on the closing in on all-time highs, DonAlt says he’s stays clear from opening any new positions in altcoins. According to him, BTC and ETH will attract capital away from the altcoin markets and leaving them bleeding out.
“First, if Bitcoin breaks out, we expect a puke in altcoins as holders sell them to catch the move. This will likely cause a liquidation cascade in the short term and set up a really nice mean reversion play for when the Bitcoin breakout stops printing [green candles].
As such, for experienced practitioners, buying the turbonuke in altcoins for a short-term bounce as the liquidations settle is an idea we’re following closely.”
However, DonAlt points out altcoin market might become more attractive once Bitcoin finishes its breakout and starts consolidation.
“To summarize, we don’t like altcoins as long as the majors look like they’re going to print big candles (hopefully green ones) at any moment. If they do, altcoins will become attractive either on a post-liquidation bounce basis, or on a larger rotational basis once the dust has settled.
Now is a good time to do your research on coins, ecosystems, compile watch lists, mark levels, etc. in search for some discounts, should the market be so generous.”
DonAlt’s full TechnicalRoundup letter can be found here.
