The market surged yesterday and many were surprised that it was caused by EOS. They always say the market is correlated to Bitcoin, so does this change mean a new alt season is coming?
Crypto thawed once again, and the biggest drivers were EOS, Cardano and Bitcoin Cash.
If you just focus on the king of crypto, it’s still trading just around 4000 dollars, so it wouldn’t seem like much has changed. But actually Bitcoin’s dominance fell to a three month low in the past week, and many analysts think we might be seeing altcoins become more appetizing to investors.
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At the same time, others warn that these signs may be just a false alarm. Alt seasons usually happen after a bitcoin rally, where investors put their profits into riskier coins. But the past doesn’t always repeat itself. Crypto projects have matured into different markets and they’re slowly growing their user base, so the next rally might not be about Bitcoin.
But there’s an elephant in the room: market manipulation. According to Bitwise, 95% of the reported crypto volume is artificial due to unregulated exchanges that use multiple accounts to trade with themselves.
According to Bitwise, that allows those exchanges to inflate their volume numbers and attract more investors and projects. They can also benefit from more listing fees. Instead of making most of their money on trading fees, many exchanges charge projects to include them on the platform.
That doesn’t sound wonderful, but according to Mati Greenspan, senior Analyst at EToro, Bitcoin is too big to be manipulated. In an email to his followers, he said:
“ [Wash trading] hasn’t actually affected the price of bitcoin itself in any meaningful way …Of the real 10 exchanges who are providing most of the liquidity in this market, 9 of them are regulated and the price of bitcoin is extremely consistent among them.”
-Mati Greenspan, Senior Analyst at Etoro
Some experts are a bit more cautious. Hassan Hassan, director of Bluefield Capital, expects the next bull run to be led by Bitcoin. In an email to Crypto Briefing, he said “bitcoin usually sees a significant increase in price,which is followed by profits and gains being shifted into alts, which is reflected in a significant drop in BTC dominance.”
So are we headed for a new alt season? After yesterday, it certainly looks like it. Most altcoins made bigger gains than Bitcoin, and Bitcoin dominance is at a three month low. On the other hand, concerns about market manipulation mean that it could be too early to celebrate.
EOS Price Action Analysis
Looking at EOS price action, after Wednesday’s 15% surge it found itself where it was on February 24th: at the 38% Fibonacci retracement level at 0.0010 versus Bitcoin, above the daily Ichimoku cloud. This level has now become a key resistance level and a break above it could open doors for further gains towards the 50% Fibonacci level of 0.0012. We could still expect a pullback towards the upper band of the Ichimoku cloud after this massive surge which could be considered as buying opportunity for those of you who’re looking to invest in EOS.
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This brings me back to you. Do you think this is the beginning of a new alt season? After you subscribed, head over to the comment section, give me a shoutout and let me know.
Remember that as the 4th point of the IDDA technique, you must calculate your risk tolerance before deciding on the investment strategy that is suitable for your portfolio. Don’t forget to complete your risk management due-diligence before developing your investment strategy.