After nearly three years, the first and largest cryptocurrency, Bitcoin (BTC) reached a new all-time high (ATH) at $19,915 on Dec. 1. However, the BTC price failed to hold above this level following a rejection. The combination of factors such as the $20,000 level acting as a resistance and profit-taking from whales and miners alluded to its price drop.
In the meantime, investors await what is next on Bitcoin; will BTC pullback significantly, or will the price rally to $22,000? Analysts postulate two scenarios for BTC In the near term. First, it could consolidate above $19,000, which would allow the derivatives market to regain stability. Second, BTC could continue to drop as traders anticipate a blow-off top after achieving an all-time high.
BTC/USD Daily Chart
A pseudonymous trader “CryptoHustle” stated that BTC consolidation would be beneficial to both Bitcoin and Altcoins. He stated:
“This correction on $BTC at ATH resistance is the best thing that could happen to the trend… 1. The longer we consolidate the more momentum the $20K breakout will have. 2. $BTC consolidating likely means Alts will bounce hard and continue to rally.”
What Could Happen on Ethereum, XRP, and Litecoin
In the previous bull cycles where Bitcoin reached a new ATH, Altcoins rallied consequently. In 2014, when BTC hit a fresh ATH of $1,200, Litecoin rallied to highs near $50. Ethereum and Ripple also rallied significantly after Bitcoin’s halving in 2016, which set the stage for the 2017 rally. ETH hit its all-time high at $1,420 in January 2018, barely a month after Bitcoin hit its near $20k ATH in December 2017. Similarly, XRP followed suit to hit its all-time high of $3.34.
A dwindling BTC dominance may indicate the nearing of a new ‘Altseason’. BTC dominance decreased from its mid-November value of 64.8% to stand at 62.6% at the time of writing.
The Ethereum 2.0 went live today, on December 1. The second-largest asset could jumpstart the ‘Altseason’ if it rallies following the launch of Ethereum 2.0. ETH hit the new 2020 high at $636 but was rejected based on a “sell the fact phase”. Though ETH decline may be extended, it is necessary to note that that there might be pullbacks before Altcoins begin their much-anticipated season. The reversal will offer ‘buy the dip’ opportunities. ETH presently trades at $573.
Several on-chain metrics indicate that large investors are driving the price of the 5th largest asset. A recent report indicated that the number of whales holding between 1,000,000 and 10,000,000 coins has increased by two in the prior week. Considering the worth, it is a huge jump.
LTC Large Transactions Chart, Courtesy: Intotheblock
The continuous increase in the number of large LTC transactions seems to corroborate the narrative that large investors are the ones driving Litecoin price which remains considerably stronger than many other Altcoins.
LTC presently trades at $88.
The third-largest crypto asset, Ripple (XRP) recently hit highs of $0.92 on Coinbase. Its uptrend was paused after a price decline. Ripple price seems poised for a pullback before XRP resumes its uptrend. It was noted that the number of whales holding 10,000,000 or more XRP coins has increased in the past 24 hours by three. This metric has been on the rise since November 20, indicating that large investors are deeply interested in XRP. XRP currently trades at $0.638.
Image Credit: IntoTheblock, Shutterstock