Altcoins are outwitting Bitcoin bulls, and on-chain indicators aren’t as green as they used to be — are more support tests on the way?
Bitcoin (BTC) is testing lower levels after failing to break through $60,000 resistance — and indicators indicate that the downturn is far from over.
BTC/USD fell below $55,000 overnight on Monday, just hours after reaching a high of nearly $59,000 in bullish early trading.
With sellers still positioned closer to all-time highs of $64,500, the largest cryptocurrency still has a long way to go before exiting its current broad trading range.
BTC returns to exchanges
The overall BTC balance on cryptocurrency exchanges is one metric that may soon cause problems for bulls.
While there has been a general steep downtrend over the last year, local supply spikes — when traders send coins back to their exchange accounts for potential quick sale — tend to reflect a more selling-driven mentality entering.
This is not the case for every conversation this week. In the last seven days, 16,222 BTC has entered global leader Binance, according to data from monitoring resource Bybt. Coinbase Pro, on the other hand, has actually lost 11,947 BTC, mirroring the overall trend.
However, Binance is not alone; Okex, Huobi, Bitfinex, and Kraken have all seen an increase in their BTC balances in the last 24 hours.
Greed is on the rise.
As Cointelegraph previously reported, a familiar face from previous sentiment shifts has returned this week — greed.
The appetite for a sell-off is increasing, according to the Crypto Fear & Greed Index, which measures trader sentiment using a basket of weighted factors, even though price action is no longer positive.
On Tuesday, the Index gave the crypto market an overall score of 68/100, indicating that “greed” was the overall mood driver.
This is still lower than the mid-90s peak seen earlier this year — a level that almost guarantees a sell-off — but volatility ensures that the Index does not remain in the same zone for long. “Greed” can quickly turn into “extreme greed” or “extreme fear” in a matter of days, if not hours.
On April 27, for example, the Index was only 27/100.
Dogecoin adds to altcoin pressure on Bitcoin
Last but not least, maybe the most noticeable element at work in Bitcoin’s problems this week is altcoins.
Initially, it was Ether (ETH) that led the pack and outperformed Bitcoin, reaching all-time highs above $3,000 on Monday.
However, after being integrated on popular trading platform eToro, Dogecoin (DOGE) is leaving the competition in its wake, returning to levels above $0.47.
DOGE/USD was up 72% in a week compared with Bitcoin’s 3% at the time of writing.
Although altcoin spikes come in waves, analysts are increasingly concerned about a longer-term trend taking center stage before Bitcoin can reclaim lost time — and market supremacy.
According to Cointelegraph, one measure indicates that the combined altcoin market cap will increase by more than 27,000 percent by the beginning of 2022.
“The next 2-3 months are going to be epic for alt coins,” popular Twitter trader Johnny predicted to followers, also predicting a $5,000 price cap for Ethereum in the near term.
Bitcoin currently has a market share of 46.3 percent, and it is steadily declining as a result of altcoin inflows.