The Bitcoin bull market is here, the asset is trading at nearly $30,000, and an awful year just came to a close – investors are in their right to be celebrating and having a little bit of fun with their profits. But one altcoin that recently was sent skyrocketing immediately was swatted back down, nearly retracing the entire move.
Speculation points to a pump and dump group behind the surprise move, but there could be another factor involved that could act as a dark cloud hanging over altcoins for many months to come.
FUN Is Over: Altcoin Experiences “Brutal” Pump and Dump Against Bitcoin
Bitcoin in 2020 rose from a low of $3,800 to end the year at $29,000. A bull market is back for the top crypto asset, and investors are eyeing the eventual breakout of altcoins across the rest of the market.
For example, Ethereum trades at roughly 50% of its former all-time high, while Bitcoin is 50% above its. The divergence has some shark-like investors searching for the right opportunity amidst the blood.
Related Reading | Bitcoin Dominance Doji: Why 2021 Could Spell Doom For Altcoins
Certain altcoins are exhibiting structures that look ready for a breakout against BTC, and one altcoin from the last bull run did just that.
FunFair (FUN), an altcoin designed for the online casino industry, experienced an enormous surge against Bitcoin. The altcoin spiked as high as 350% against BTC over the course of several hours.
In just one hour, however, the entire rally was retraced, leading the crypto community to speculate over if pump and dump groups have returned to crypto. These groups coordinate efforts to artificially pump a coin’s price, only to dump it once FOMO is sufficiently ignited.
They were extremely popular at the height of the crypto bubble in 2017, and they could be back. Or could it be a sign of something else?
Pump and dump? Or did a whale end all the fun? | Source: FUNBTC on TradingView.com
The Other Side of The Coin: Older Crypto Assets Face Wave Of Sellers On The Way Back Up
While it very well could be fun and games for a pump and dump group, a “whale call” alerting users to a massive sum of FUN tokens being moved could have tipped anyone off about the coming dump.
The fact such a large supply was moved suggests that this wasn’t the action of a pump and dump group, but a whale selling down the first sign of a major rally in the altcoin.
With altcoins still down so low, and potentially more danger ahead for the asset class as the SEC begins to stiffen regulations, whales could be waiting in the water, ready to liquidate their tokens as soon as they can.
Most altcoin investors who got in around 2017, are still underwater and could be waiting to sell the moment they can, even if just to exchange for Bitcoin. It could be the primary factor behind why no alt season has returned, and the short-lived over the summer was kept to only DeFi tokens and other new alts.
Featured image from Deposit Photos, Charts from TradingView.com