Traders expect a slow fourth quarter for Bitcoin and altcoins, especially as the BTC dominance rate begins to rise.
The price of Bitcoin (BTC) has been stuck in a range for weeks, but traders generally expect a slow fourth quarter for the highest rated digital asset.
In 2018 and the fourth quarter of 2019, the net close was negative, injecting a bit of bearish sentiment into the market. In the short term, a dull fourth quarter of further decline in the price of Bitcoin could cause altcoin prices to fall further.
At the moment, several technical analysts are closely watching the jump in the Bitcoin dominance index to warn against a downturn in the altcoin market.
The worst is over for altcoins?
As published by the Cointelegraph, in the last two weeks most small altcoins and decentralized finance tokens (DeFi) have fallen by 30% to 60%.
The fall in the altcoins worsened when Bitcoin rose from $9,981 to $11,179 from September 9-19, and during that period, a take-profit rally appears to have taken place. Analysts believe that the profits from altcoins and DeFi became Bitcoin and stablecoins.
Thus, although Bitcoin saw a strong upward trend, DeFi tokens fell and altcoins remained in steady decline.
The settlement of the altcoin occurred when Bitcoin began to fall after being rejected from a key resistance level of US$ 11,100. In the past 15 days, the BTC has fallen almost 6%, stabilising at just above US$ 10,500.
According to Cointelegraph employee Michael van de Poppe, it is unlikely that the current fall will end anytime soon.
In a tweet, van de Poppe posted the following chart and explained that encryption markets usually see “boring and corrective” phases during the fourth quarter. Traders said that historically Ether will hit bottom in December and start moving next quarter.
Van de Poppe predicted that “BTC’s dominance will increase, to have a new season in the first quarter of 20201.
A trader with a pseudonym known as “Loma” expressed a similar feeling. He said that the last time the altcoins fell so much, BTC had a big fall in a short period.
This time, the altcoins are decreasing, while BTC and Ether remain relatively stable above their respective support levels. The trader noted:
“ALTs downloading now while Bitcoin barely moves. Last time I saw this, Bitcoin painted a fat candle. ”
Relief rally in sight?
Since the beginning of October, the cryptomaniac market has faced a number of negative events that may be weighing on investor sentiment.
On September 26, the KuCoin exchange was hacked for US$281 million and, although the price of Bitcoin has not been corrected with The News Spy, it may be preventing the upward momentum from increasing. The U.S. Commodities Futures Trading Commission (CFTC) then announced that it had accused BitMEX of violating the Banking Secrecy Act on 1 October.
Then on October 2, US President Donald Trump tested positive for VOCID-19, causing a stir in traditional and cryptographic markets.
After several important events, investors expect increased volatility and some traders have suggested that a little pressure may be on the plans.
Another popular trader known as “Bizantyne General” said this is the “perfect” time for a quick squeeze as it would shake weak hands. The trader also implied that, in his opinion, there is a lot of capital on the fringes of the cryptomaniac market. He said:
“With all the uncertainty happening now, especially in cryptography, it would be the perfect time to blow up and leave all the weak hands behind. BTW, SSR is still historically low, which means there is a lot of dry dust on the side lines. ”
Overall, traders anticipate a dull quarter ahead for Bitcoin and altcoins, but last month’s intense sell-off could lead to a strong recovery of relief.