Bitcoin leads, alts follow?
There are only so many ways to describe a ranging environment. Just as the merge hype went into turbo mode, Bitcoin took the market in its own direction, as usual. Ethereum exhausted its ‘merge hype
’ momentum, and it remains to be seen how the market will value this asset as new revelations about PoS vs PoW emerge.
My 2c on the matter are in this post
Regardless, Bitcoin is back in the limelight. Its market cap stands at $370 billion, while Ethereum lags at $164 billion at the time of writing.
Interestingly enough, Bitfinex CTO Paolo Ardonio released a not-so-subtle statement
on Monday underlining that ETH cannot compete with BTC as a form of money now that it has transitioned to PoS
In other words, the writing is on the wall. Even if ETH 'flippens’ BTC, it will likely be fleeting because proof-of-stake is not the monetary innovation (partly because it doesn’t adequately deal with regulatory capture
), but proof-of-work is.
The altcoin market is in the process of partitioning itself into securities and commodities. As this gets sorted out over the years, capital will tend to flow in the direction of large assets with a demonstrable track-record and robust adoption like BTC, LTC and ETH.
As ever, Bitcoin leads and alts follow. This is especially true when downtrends threaten new lows as the market flees to safety. In my mind, a new Bitcoin bull cycle will materialise when:
- the market realises the Fed is not in control.
- the market prices in future money printing policy.
- legacy finance moves capital into the crypto economy.
In terms of current technical data, BTC must hold $18,300 on a daily closing basis to maintain the range, and potentially break to the upside. If the level is lost, we could see fantasy dirt-cheap prices below $16,000.
Such a scenario is by no means guaranteed and despite all the doom porn and bear salivation at the prospect of buying your sell orders, Bitcoin is still holding the lows.
On the other hand, BTC/USD faces immediate resistance at $21,700-$22,000. Once this order block is taken out on a daily-closing basis, the runway is clear for $30,000.