This time it's different?

in #bitcoin3 years ago (edited)

Famous last words uttered by traders right before it turned out not to be different at all.

What is different you might be wondering?

Well, the fiat fund flows into crypto are different, that is what.

In the past you would often seen bitcoin rally first and then once bitcoin would start to reach overbought conditions or brush up against some major resistance level, you would see money start to flow out of bitcoin and into other coins.

In fact you can clearly see evidence of that related to Ether.

Take a look at this chart of Ether/BTC:

(Source: https://www.coindesk.com/bitcoin-bull-trap-not-says-lesser-known-price-indicator/)

As you can see, bitcoin clearly lead ether in December when bitcoin ran up to make new all time highs.

Then a few weeks later, ether followed suit and made all time highs.

Looking very much like money rotated out of bitcoin and into other altcoins.

Things are different this time around:

What is interesting right now is that trend from last year no longer seems to be the case.

In fact, take a look at the second part of this chart:

(Source: https://www.coindesk.com/bitcoin-bull-trap-not-says-lesser-known-price-indicator/)

You will see that now bitcoin and ether are moving basically in lock step with each other.

A rising tide lifting all boats?

Is this a good thing or a bad thing?

Well, in my opinion it probably means that if bitcoin were to breakout of it's recent doll drums there is a chance that it starts pulling money from altcoins again.

A phenomenon I like to lovingly refer to as the "bitcoin suck".

We saw it happen a few times in the middle of 2017.

It basically means that as bitcoin goes higher it starts to pull funds from other coins to further fuel it's rally, the net effect is soaring bitcoin prices and bleeding altcoin prices.

There is no guarantee this happens again, but in my opinion the current setup is looking like that might be the case to me.

Once bitcoin gets that catalyst to start it's next run, it may indeed be at the expense of many of the altcoins.

Or perhaps, they can all go up together in a beautiful symbiotic relationship. :)

Plan accordingly.

Stay informed my friends.

Follow me: @jrcornel

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BTC is the entry point for all crypto. So until we have legit Fiat pairs we will always be subject to the movements of BTC.

Definitely. We also need more pairs for SBD. Right now its only major pair is Steem.

This time is different, we will moon for real.

all cryptos will be correlated in prices since this is the starts of the age of the new version of the internet, we will see altcoins and cryptos doing business commercially, with the ongoing regulation this will open the door to institutionalized investors.

I hope some of that institutional money comes to Steem. Then we'd be laughing about the day we were excited about it hitting $3!

No sure I am a fan of the Bitcoin Suck 🤪

But good information to keep me informed. STEEM ON @jcornel 👍

Looks like the market kind of bottomed , and we now going up crazy fast.
The next bubble starting to grow, with the inpatient of the previous bubble to get rich fast.
Will be interesting this season :)

One thing to consider is all the new exchanges offering USD pairing. That could be one of the reason that other cryptos are disintegrating from bitcoin. We won't see much correlation from last year in my opinion. We are in the next phase of crypto life cycle.

Yes that is a great point. There basically was no other fiat on ramps to any coin besides bitcoin until late last year. Thanks for the reminder!

Now if we can only get some good pairs for SBD! Then it wouldn't be so tied to the price of Steem!

Good analysis... I think the alt-coin bleed "bitcoin suck" is a result of over-popularity and positive speculation in bitcoin. People were buying bitcoin that had no idea what they were doing; while crypto enthusiasts started using bitcoin as a crypto cash-out at the same time.
Is it possible a different coin will be the crypto-cash-out on the next alt-coin bleed; like say Ripple or Ethereum? It has to be something the media will hype, and the enthusiasts only care about because it set some standard....

Good points. Whatever coin it is, it will have to be one with many fiat off ramps.

Ooo yeh, forgot that point... "off ramps" can't be a "suck" currency without that.

Yes, planning is really important when we stand on the volatile boat, and your opinionated post is really important because we need opinions of experienced analysts who can explain in and out of the situations because lot of people don't know about market conditions or don't know how to read charts but when people get charts plus explanation then they will get some idea. And yes, in my opinion also possibly the Altcoins going to move to push the prices of Bitcoin. Thanks for sharing this informative post with us and keep doing the great work. Wishing you an great day and stay blessed. 🙂

I am hopeful that they can continue to move up together, but I have a feeling that won't last very long. Here's to hoping though!

Yes, let's hope for the best.

Yup im one of those who is learning to read charts . Read the article, i do not even know what resistance is LOL AT ME. I need help or i need to stop trading hours for money and start learning.

I think certain Alt Coins are going to flip Core Bitcoin this year with the ratio. I know a lot of people that hold Bitcoin (including myself) don't wanna hear this but its something to consider. Just look at how fast EOS is rising and its core functionality. 100K tps, governance, easy of use, dapps lining up to use it. ETH inflation is dropping to 90% with the upcoming Casper upgrade. The hybrid version is ready. It very possible ETH makes a massive run ahead of the new upgrades and as dapp explode with adoption on main net. Maybe I am wrong? I guess this year we'll find out.

Very good points. I think the current environment could last for some time, at least until bitcoin gets a real catalyst or some regulatory agency scares people out of altcoins and back into bitcoin saying they are all securities (again).

I think previously, the only way to buy Alts has been to use fiat to buy btc, then move btc to an exchange that sells Alts and exchange there.
More recently though, alt exchanges have started to accept fiat deposits, so we may start to see decoupling between cryptos!

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Good analysis. That's why you should always hold at least 40% in btc (my personal opinion). Cheers

You may have seen this but similar thoughts echoed on this Twitter tread. Probably even the source of the coin desk article. Well worth the read. https://twitter.com/bmbernstein/status/986674310835253253?s=21

That was a great read. Thank you for sharing. It seems I'm not the only one thinking a "bitcoin suck" may be on the horizon.

All the alts are moving up in line with bitcoin. Even doge. I think someone has come into the market and bought everything at it's lows and as the price rose, the algo trading bots started buying too.

To listen to the audio version of this article click on the play image.

Brought to you by @tts. If you find it useful please consider upvote this reply.

Smart!

The question is....when will btc get that catalyst. Enquiring minds want to know .... right now.
So steem is up i want to take 100 out of my wallet and put it into btc but i dont remember how. Poloniex is disabled. I had an event last summer that caused me to forget some things. Im trying to get back into trading and other online adventures...but have been caught in the gotta make dollars quick trap so been doing a lot of hours at the hourly job. I need to carve some time and relearn, find old accounts and passwords. I also need to get in a reddit or something where people are talking about this stuff

A lot of prominent youtube personalities are calling for distinct bitcoin bull seasons and separate alt-coin seasons since this happened in the past. I agree with JR that this time everything will be correlated.

That said, I still feel nervous holding ETH here even though it's been a good trade for the last month. Too many legitimate contenders for ICO platforms including EOS, NEO, WAN, etc with much lower market caps.

This is why during this early phases, even on bear or bull trends, it's better to stack up btc on at least 30% of your portfolio so you could re-buy some of the bleeding alts to btc-cost average your purchases. Until every alt has a USD pairing, this phenomenon happens and we always expect btc as the first-mover on crypto.

Agreed. Well said.

@ned could pay some exchanges to add a Steem/USD pair.... I think with a million he could get this done...

But he does not do it...

There are both advantages and disadvantages in having USD pairings with altcoins. Imo, Steem and SBD is WAY better if it has BTC pairings only. But in the future we might expect that.

Great post. I'd appreciate that you see my content as well. I do technical analysis for the community with a focus on teaching.

https://steemit.com/bitcoin/@philakonesteemit/bitcoin-btc-the-road-to-all-time-highs-of-usd35-000-believe-in-bitcoin

Nicce post..Good information. Thanks for sharing .

Good excellent publication

Excitement is building again for the crypto market and the prices are reflecting it, thankfully. I think we will definitely see Bitcoin pulling from the altcoins sometime soon and many more times in the future, especially with lightning being an option. Great points, as always!
Ivy

this market is fluctuating, new investments and alternatives will affect the market positively or negatively, the learning of this market is important to know how and when to invest

Thank you
I keep an eye to your post all the time...its always filled with useful information

Great Chart BTW!

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The must important this is the the market move to bullish mode now

Agreed. Sentiment is flipping. You can feel it and see it in the headlines.

I am ready to dump most of my altcoins for BTC :-), except for Steem

hoping that they all go up

good information thanks for @jrcornel

Good news and useful to all readers. Thank you @jrcornel

We had big corrections and crashes. People who thought that this will be easy game, fast money and then will exit - lost them money. We had Hype and then Anti-hype. Today we are slowly building again the crypto and for now we will not have again this big corrections, because remained only serious people who is mining crypro, trading, investing in projects. So from this lesson we understood a lot. Now we will be growing, because a lot of businesses integrates crypto, this means that people will again buy crypto, because will think it's safe. I think in 2018 we will hit 30K of Bitcoin. Let's hope the best for over youmg crypto world!

Plan accordingly? How? You didnt tell us with 100% certainty what was going to happen next.