Resurrection of Altcoins Presumed Dead Is No Zombie Apocalypse but Something Else
Bloomberg’s recent article noted the rapid growth of certain altcoins which were long considered dead and gone. But due to cryptocurrency’s decentralized nature, no altcoin is truly dead.
”Cryptocurrencies just tend to zombify or fade away over time, rather than dying quickly,” Nic Carter, Coin Metrics co-founder, told Bloomberg.
In a matter of two months obscure and not very “alive” altcoins like Einsteinium almost doubled in value. Bloomberg suggested several interesting reasons behind this spooky event and even went as far as to suggested that coronavirus was an important driving force behind it, which was perhaps a nod to some classic zombie epidemic movie.
So why are the dead rising? Voodoo and viruses are not to blame, rather it is a part of a broader trend, colloquially known as altcoin season. In this article, we will explain what is happening, contrary to Bloomberg’s eschatological version.
The Price Surge That Was Promised
The popular crypto trader known as Moon Overlord made two important predictions in 2019. Firstly, he suggested the pattern of the pre-halving Bitcoin pump.
#Bitcoin has traditionally starting pumping around 1 year on average before it's halving date
The next halving is estimated to be May 2020, meaning that the uptrend will begin in May of this year
— moon (@MoonOverlord) January 23, 2019
This observation turned out to be spot on, as Bitcoin started surging in April 2019.
The same year Moon Overlord made another interesting prediction, which we can only now see unravel. Back in November 2019, he suggested that altcoins were entering an “accumulation period” which would last until 2020.
$BTCUSD 2012 – 2015
VS.#Altcoin Marketcap 2016 – 2019
We're now entering the accumulation period for $ALTS, it will likely last until 2020.
2020… ? pic.twitter.com/6gjY8nnsiK
— moon (@MoonOverlord) July 6, 2019
Over the past months, we have witnessed a dynamic that may once again support Moon Overlord’s prediction. While Bitcoin’s price went up by around 35% since January, it was resoundingly outpaced by a number of popular altcoins.
Alt-season Is Coming
Coin360’s chart conveniently shows that quite a few important altcoins recently showed a by far larger growth than Bitcoin. Ethereum and Bitcoin SV even made a three-digit increase since the start of the year. These two, along with Ripple and Bitcoin Cash, are the largest cryptocurrencies on the market after Bitcoin with $50 billion combined capitalization.
People have been speculating ever since the previous bull market in 2017–18 whether there was still a real correlation between Bitcoin and altcoins. Cases were made that altcoins were widely underperforming comparing to Bitcoin and thus correlation was slowly eroding over time. But a more recent understanding is that when the market is bull-dominated, altcoins tend to closely follow Bitcoin’s lead.
Of course, there may be very tangible unrelated price drivers at play. For example, Ethereum may be surging in anticipation of the Ethereum 2.0 launch scheduled for July 2020, which is expected, among other things, to introduce long-anticipated scalability improvements.
Another important upcoming event is Bitcoin halving. In the past halving made Bitcoin starkly outperform altcoins. But experts have not yet reached consensus on the impact halving will have on the price this time, if any.
Nevertheless, there seems to be an undeniable uptick in altcoin popularity in Q1 2020. Many suggest that the stars have aligned and the portents are clear that altcoin season is once again upon us. According to this poll, there is a growing trend in the community to heavily invest in altcoins.
How exposed are you to ALTs right now?
— Loma (@LomahCrypto) February 4, 2020
Whether altcoin season is indeed a thing and altcoins will continue surging time will shortly tell. But so far it sure looks like it.
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