Altcoin investors, traders, and holders should be very aware of the current situation. Currently, Bitcoin (BTC) is hovering around $30,000 to $32,000 and if it undergoes a major decline in prices, there is a fair chance of altcoins suffering more.
Many technical analysts including Filbfilb, co-founder of Decentrader, are talking about it. A pseudonymous tweeted on Friday night that if the BTC drops 30%, the altcoins could drop twice harder which is not illogical.
When BTC’s price was around $55,000 with its all-time high of around $60,000 ranging from March to May, altcoins exploded. People were making money and many stated that that was a revolutionary period for altcoins. Similarly, during the recent crash when the world witnessed the fall of BTC from $65,000 to $28,000, altcoins also bled significantly.
Experts say that different altcoins are encountering a situation called the “catch up risk” which means that a little side down movement by Bitcoin could cause altcoins investors so much pain.
The May and June down motions of Bitcoin have decreased its year-to-date performance to 5.71%. On the other hand, the high-potential and top-cap altcoins like Ethereum have not seen a big drop in their YTD returns.
For instance, the price of Ethereum has dropped by 60% from its peak at $4,384. In spite of such a strong downfall, its YTD returns are at 141% which is pretty decent.
It clearly shows that altcoins have provided better returns to their holders as compared to BTC. Therefore, there is a fair chance of conversion of these funds into BTC or fiat currency.
Will we see Bitcoin at $20k?
The support at $30,000 is pretty strong as it only merely broke after several attempts. Most of the analysts are very sure that the market is presently not bearish and expect a bull movement very soon.
The experts state that the bull market is not over and we have still not seen an all-time high after the BTC halving of 2020. However, after the latest BTC correction, many have flipped their sides and are indicating a bear market arrival.