The altcoin season is coming soon? May be back light, beware of falling

"The altcoin has finally come out," the senior speculative user Wang sighed after seeing the XLM (Hanging Coin) surge yesterday.

Bitcoin has been rising for five months since the beginning of 2019. However, the overall market of the cryptocurrency industry has shown the trend of "bitcoin outcrops, altcoin and chicken feathers". But since last week, the altcoin market seems to have begun to slowly warm up.

The mainstream currencies represented by ETH showed a different trend of rising trend last week. According to OKEx, last week ETH rose nearly 20%, XRP and BCH rose 10%, LTC and BCH rose more than 6%, while BTC rose only about 1% in the same period, still in the range of $10000 to $10500.

According to the OKEx market, XLM (Hanging Coin) continued to strengthen from around 20:00 on the evening of September 18, and the increase in 24h was close to 40%, reaching a three-week high. As of 9:00 am on September 19, XLM reported 0.0806 USD, while BTC saw a short-term sharp decline trend at 11:00 am today. It has fallen below 9700 USDT and temporarily reported 9546.60 USDT, with a daily decline of 5.11%.

OKEx analyst Yan Song predicted the altcoin season based on the performance of the above-mentioned currency – "alt season" is coming, "that is, a return on the altcoin currency has a significant growth period regardless of the performance of bitcoin." It shows more signs now. In recent weeks, bitcoin market share has shown a significant stagflation around 70%, while the altcoin has begun to grab share. This week, bitcoin market share fell rapidly from 70% to 67.5%. Here to give you the concept of "cotton currency" mentioned in this article, according to OKEx's explanation, in addition to bitcoin, other subsequent generations of blockchain technology for the bottom layer are called "cotton coins." However, after the development of blockchain technology for many years, many altcoins have formed a certain size of market capitalization and influence. Many people now refer to these altcoins as mainstream currencies other than BTC. Of course, the "cotton currency" is not a counterfeit currency, and some even carry out many innovations for the lack of bitcoin. For example, Ethereum (Ethernet), the stack operation of replacing the bitcoin with a smart contract is a huge innovation. There are also some good "cotton coins" that can solve some pain points in real life and have practical application scenarios. As for other direct application of source code, it may be at another level. "Altcoin currency" can be summarized as: based on bitcoin source code or ideas; there are innovations; there are certain application scenarios. In September, ETH prices rose nearly 30%. Ethereum's Gas usage is considered one of the reasons behind its price explosion.

According to Glassnode data, the Ethereum Gas usage rate has reached an all-time high. However, the proportion of fees generated by the transfer of USDT exceeded 20% of all online activities this month. Trading on the Ethereum blockchain also showed a similar trend, with only 30% of transactions being ETH transfers. In addition, in June, the proportion of USDT transactions on the ETH network was less than 1%. Last week, Tether occupied about 25% of the total network traffic.

This round of the altcoin currency rose by ETH

 

For this wave of the currency market, many analysts are not optimistic about the trend of the market, and believe that the rise in the altcoin currency is temporary. Once the BTC market starts again, the funds will return to the BTC, and the altcoin currency will continue to fall.

Li Zhe, a partner at Clipper Coin Capital, believes that "the recent mainstream currencies other than BTC have rebounded last week. On the one hand, ETH 2.0 is about to launch soon. The future expansion of ETH will be greatly improved, plus Various reports from the Shanghai blockchain media, the fundamentals and news, stimulated a wave of speculation. The rise of ETH has recently led to other bullish currencies, but the mainstream currency market outside BTC is still rebounding. Not a bull market, the market is difficult to sustain. "

OKEx Investment Analysis Director K Ye believes that the concentration of mainstream and non-mainstream currencies has mainly rebounded.

"As we have seen, in the last round of rising prices, BTC's brilliant performance attracted most of the funds, causing blood draw effects on other currencies. Many cryptocurrencies did not rise and fall, and even hit record lows, resulting in a large number of The low-priced chips appeared. During the BTC sideways period, these low-priced chips were discovered by the market, which induced speculation, speculation, bargain-hunting and other actions to promote price increases. Looking back at the market, we can see that the current round of gains is mostly experienced. The currency that has fallen for a long time." K Ye analyzed.

“I think the rebound of the big currency is purely due to technical indicators. The large currency represented by ETH has gradually shrinked after more than two months of decline, and it faces an opportunity for easy breakthrough in the moving average. There were too many people going on the front, and the stock funds technology broke through. The major currencies began to cross the 20-day moving average one day before."

Tang Xiao, an cryptocurrency market analyst, analyzed the analysis of the logic of the rise in the altcoin market in his public account. Tang Shao believes that this situation of the altcoin is unlikely to last for a long time, because the stock funds will be finished after all, as long as the BTC starts again, the funds will return to the BTC. "So, personally, the rise in the big currency is temporary. "Now there is no need to get out of the car on the big-money car. Once the BTC starts again, it is almost time to get off.

“The popular currency market under the leadership of ETH did not drive the rise of the pie. The BTC continued to fluctuate as it has in the past, and even showed a downward trend. In this case, the mainstream currency began to call back. According to this trend Look, next BTC will continue to be weak, the mainstream currency will continue to fall, the previous increase will gradually retreat. The overall market will once again fall into a downturn." Blockchain a capital trader A Kun predicted that the mainstream currency is about to fall.

OK Research senior researcher Li Lianxuan believes that the rise of the altcoin currency is mainly driven by ETH. Although the ICO-like crowdfunding model has been sluggish, Ethereum is still the king of the public chain. “Ethernet has plunged nearly half of the price in the past two months, and the value has been seriously undervalued compared to BTC, so it has recently retaliated to repair prices.”

However, Li Lianxuan believes that from the current situation, ETH, BCH and XRP have broken through the 30-day and 60-day moving averages, and the market has entered an upward trend in the medium and long term. In the digital currency market, it is common for a single currency to rise or fall by more than 10% in a single week. These signs are not yet confirmed to usher in the “cottage season”.

Current investment advice

According to the current market conditions, analysts give investors advice:

“The current market structure belongs to the application-oriented public chain, so it is recommended that you can tilt the cryptographic assets like ETH, TRX, XRP, etc. in terms of asset allocation. Especially those with recent concepts (meeting, upgrading, production reduction) The public chain tokens of the company have more potential. Although the market is now in a divergent pattern, we still cannot ignore the BTC market performance. The altcoin collective performance is better, based on the flat performance of the BTC (sideways shock). On the other hand, if the BTC falls sharply, then it is not impossible for the market to return to the unified pattern," K said.

Li Zhe still recommends that investors vote for BTC, and distribute other mainstream currencies with fundamentals.

Li Lianxuan believes that the current uptrend of the altcoin is not over yet, but according to Dow Theory, there will be a wave of corrections. Therefore, investors are advised to wait and see in the short term and buy after the callback.

  Text | Wang Ye

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