Is An Altcoin Reversal Happening?
As previously reported, Ethereum is witnessing a big boost to its market capitalization as buyers turn up in droves to send it higher. Within 24 hours, Ethereum’s daily trading volume went from $5 billion to $10 billion. That doubling puts its volume within reach of Bitcoin’s, meaning Ethereum is back in the big leagues.
Part and parcel of Ethereum’s move is its consistently busier network. Gas fees, actual transactions, and network congestion have all been reaching near all-time highs set in 2017/2018.
Investors around the world watching behind the scenes metrics like network congestion appreciate that Ethereum is gaining real utility. Added utility implicitly means that the network has value, too, since network usage costs money (in gas).
What does all of this have to do with the altcoin market? Well, the short answer is that Ethereum is the king of altcoins. For the long answer, however, you’ll need to keep reading.
Ren started out as a dark pool solution, but has evolved into much more than that. A dark pool is a ‘secret order book’ that hides the amounts of cryptocurrency being traded. The purpose of a dark pool is simple: Trade cryptocurrency without moving markets by signaling the size of the trade.
At the core of the dark pool concept, however, is privacy. Ren discovered how to create and maintain secret computations that effectively shield transactions in complete privacy.
Ren’s secret computation virtual machine is capable of much more than just secret transactions. The RenVM also provides interoperability between blockchains while adding total privacy to them as well.
With Ren’s mainnet going live and a raft of financial protocol’s express interest in using it, Ren is one to watch going forward.
Ethereum Lights the Way
The 2018–2019 bear market took a heavy toll across the cryptocurrency market. None suffered quite as much as altcoins did. They lost out in a big way to both USD and BTC pairings.
After over 1.5 years of declining prices, altcoins appear to have finally hit rock bottom. At this point, it appears there are few sellers willing to let go of their digital assets, especially if they’ve been holding since somewhere near the top.
That’s great news since it means most of the weak hands have been shaken out. With the disappearance of most sellers, altcoins have an optimistic horizon that only needs an influx of buyers to truly blossom.
However, that isn’t likely to happen without Ethereum leading the way. Ethereum is like a mining canary – it goes into the darkness first, and lets the rest of us know if the way is safe. For that reason, Ethereum often needs to make the first move before investors feel it’s safe to buy lesser altcoins.
Altcoins Have Bright Prospects
As such, once Ethereum made its first 10%+ move in a long while, the rest of the cryptocurrency market also perked up. Digital assets like XRP, TRX, ADA, XTZ, and VET perked up as though they had been watered for the first time in days.
Bitcoin, on the other, has remained inactive throughout the altcoin market action. In prior altcoin markets, that has typically been the case. Here’s a quick shortcut to reading the cryptocurrency market:
- Bitcoin moons, the rest of the market crashes
- Bitcoin crashes, the rest of the market crashes
- Bitcoin stays flat while Ethereum rises, the rest of the market rises
While that guide isn’t true 100% of the time, it has worked out on enough occasions that some might say it’s the closest thing to a cheat sheet that investors really have.
Another angle to pay attention to is Bitcoin dominance. When Bitcoin dominance reaches near all-time high levels, then a pullback is likely.
Just like any other chart, the Bitcoin dominance chart moves in cycles. It can’t keep going up forever, so when it does pull back, that liquidity flows to altcoins or USDT.