For a long time, Bitcoin has dominated the cryptocurrency market and its performance has outshone all other cryptocurrencies. However, now that BTC price is stuck in a tight range, traders have started looking at other currencies as well. Since early August 2022, altcoins have seen an uptick in volume and interest among traders who believe that the altcoin season is back.
For bitcoin, the reasons are obvious. As the flagship cryptocurrency, BTC is being used as a store of value and means of exchange. A significant percentage of its price movement is determined by traders using it as a hedge against risk in traditional markets like stocks or commodities.
BTC Still Has Traders’ Faith
Altcoins have taken on a variety of roles in recent years: some fulfill payment functionality such as Litecoin (LTC) and Bitcoin Cash (BCH); others can be used for smart contract functionality like Ethereum (ETH) and NEO; still others simply offer utility to users such as Binance Coin (BNB). Finally, some altcoins are purely speculative instruments that traders view as possible replacements for bitcoin in terms of market dominance if they prove useful enough through their unique properties or token economics.
Bitcoin (BTC), the largest cryptocurrency by market capitalization, has been stuck in a tight range of $10,700-$11,300 since the beginning of August. The price has not fallen below $10,500 and has only gone above $11,500 for brief periods. This consolidation pattern is typical before a big run up or selloff in any market. For example:
When Bitcoin cut its losses from $6,000 to now around $8,000 during July’s selloff it was consolidating within a tight range until it started trending higher again.
Similarly when Bitcoin was trading between roughly $8k and 13k during May and June 2018 it had also been consolidating within this range for weeks before starting to trend up strongly once again.
We believe that the altcoin market is in a strong position to outperform BTC and ETH over the next few months. In particular, we are bullish on Binance Coin (BNB), USDT, Litecoin (LTC) and Ethereum Classic (ETC). The altcoins listed above offer low transaction costs, fast confirmation times and scalability solutions that could help them compete with large-cap coins such as Bitcoin or Ethereum in terms of utility. They are also available on major exchanges like Coinbase which makes it very easy for investors who prefer trading with fiat or using their debit card instead of crypto wallets at all times.