Summary:
- Bitcoin has corrected hard to $13k after setting a 2020 peak of $13,858
- Bitcoin dropping hard could signal the end of its bullishness at least in 2020
- If history is to go by, Bitcoin correcting might provide some room for Ethereum and altcoins to thrive as witnessed in the 2017/2018 bull market season
Bitcoin (BTC) has once again proven why it is the King of Crypto by hitting a 2020 high of $13,858 – Binance rate – earlier today. However, Bitcoin’s move closer to the intended target of $14k was short-lived as it has since correct hard to $12,885 and is now battling to retain the $13k support area.
Bitcoin Has Run out of Gas, at Least for 2020
There is no doubt that Bitcoin is in the midst of a bull run but its momentum for the year might have come to an abrupt end with its push to $13,858. If this turns out to be the case, Bitcoin will go through a consolidation phase for the next few months and possibly return to its bullish ways in the first quarter of 2021.
Ethereum and Altcoins Stand to Benefit from Bitcoin Correcting Hard
Bitcoin’s dominance is currently at 63% after falling to as low as 57% in early September. The latter time period and lower Bitcoin dominance, was when BTC had dropped to $10k and consolidated at this level for a week. Early September was also the same time Ethereum had set a 2020 peak of $490.
Additionally, the rise of Bitcoin from September to date has had a detrimental impact on Ethereum as well as altcoins. BTC has stolen all the attention through multiple news developments such as PayPal getting into crypto and publicly traded companies such as Square and Microstrategy, announcing their mega purchases of Bitcoin.
To note is that the current 63% dominance level for Bitcoin might prove to be a short term area of resistance for BTC as it consolidates for the next few months. This fact can be seen in the following screenshot of the Bitcoin dominance chart courtesy of Tradingview.com.
Slight Chance History Will Not Repeat Itself for Ethereum and Alts
The theory of Ethereum thriving after Bitcoin correcting has also been postulated by popular crypto personality, Ran Neuner who shared his opinion via the following tweet.
First BTC runs and sucks the blood out of Alts. Then ETH follows, then its Alt time. Start placing your chips!
— Ran Neuner (@cryptomanran) October 28, 2020
However, Bitfinex Whale @Joe007 was quick to throw cold water to the theory by explaining that known Bitcoin patterns do not often repeat themselves in the crypto-verse. His response to Mr. Neuner’s prediction that Ethereum and alts will thrive next, can be found below.
It’s so good that each next Bitcoin price cycle always goes exactly like the one before it, down to minute details, right? I mean, how else could you make sure all these 2017 shitcoin FOMO bagholders finally become crypto-millionaires? https://t.co/G249E7roiu
— Joe007 signals·alerts·funds are scams, all of them (@J0E007) October 28, 2020
Conclusion
Summing it up, Bitcoin has set a 2020 high of $13,858 in a move that might be the last bullish one for 2020. This is based on the Bitcoin dominance chart getting rejected at the 63% level which could signal the beginning of a mini-bull season for Ethereum and altcoins as Bitcoin consolidates.
However, and as @Joe007 has pointed out, known Bitcoin patterns might not necessarily play out and BTC might continue on its bullish run in 2020 thus decimating Ethereum and altcoins in the process as it steals the spotlight.
Therefore, it would be wise to be cautiously optimistic regarding ETH and altcoins thriving in the midst of a clear Bitcoin bull run.