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During the crypto hype bubble that made Bitcoin a household name, altcoins exploded to all-time highs and generated life-changing wealth for early investors.
Since then, there’s been a three-year downward trajectory that is about to resolve further to the downside, putting altcoins at serious risk of extinction.
Bitcoin Halving Is Crushing Already Battered Crypto Assets Further
Bitcoin’s halving is here, and interest is returning to the cryptocurrency space. However, that interest is almost entirely going into Bitcoin, leaving altcoins like Etheruem XRP, and others in its dust.
Capital is pouring out of alts and into BTC in hopes that the Bitcoin halving causes prices to spike in the days ahead.
Related Reading | Bitcoin Dominance Exposes Altcoins To Bounce or Die Scenario
The scramble to buy more Bitcoin has caused altcoin investors to dump their holdings in exchange for BTC. This is evident across nearly all altcoins on their BTC trading pairs, which have recently fallen to new bear market lows.
The total altcoin aggregated market cap, sans Bitcoin, when paired with BTCUSD on TradingView, provides a clear visual look at the health altcoins.
A massive, three-year-long pattern has formed on the metric’s chart, potentially signaling a dangerous collapse in alts that could take them back to prices from 2016.
Altcoins Could Face Certain Doom If Weekly Closes Outside of Three-Year Triangle
The total altcoin market cap paired against BTC acts as an inverse Bitcoin dominance chart, providing a better look at the balance between alts and Bitcoin.
During the explosive pump to all-time high in late 2017 and early 2018, Bitcoin dominance fell to the lowest point ever. Since then, it’s been on an upward trend that hasn’t yet stopped.
A reversal appeared to be taking place, but the most recent price action has caused a massive symmetrical triangle to form.
Related Reading | Stimulus Checked: Here’s The ROI on a $1,200 Investment in Top Crypto Assets
Interest in Bitcoin’s halving has caused altcoin holders to purge their remaining holdings in exchange for Bitcoin. The change in the flow of money has caused alts to break down from the triangle on weekly timeframes.
If the weekly candle closes below this line, altcoins could be in danger of having their valuations drop to pre-2017 levels, with many reaching close to zero.
The one savior for alts is the fact that it was the last Bitcoin halving that caused the very first major altcoin season, and is what set Bitcoin dominance on a downward trajectory for the first time.
If it happens again, this latest breakdown is just a bear trap before altcoins take off.
Featured image from Pixabay
