Traders are expecting a slow fourth quarter for Bitcoin and altcoins, especially as the BTC domain rate begins to rise.
The price of Bitcoin (BTC) has remained stagnant in a range for several weeks, but traders generally expect a slow fourth quarter for the market-leading digital asset.
In 2018 and 2019, the fourth quarter closed negative, injecting a little bearish sentiment into the market. In the short term, a dull fourth quarter with a fall in the price of Bitcoin could cause altcoin prices to plummet further.
At the moment, several technical analysts are watching closely the rebound in the Bitcoin dominance index and are warning of a downturn in the altcoin market.
Is the worst of the worst for altcoins over?
As Cointelegraph reported, over the past two weeks, most of the smaller altcoins and decentralised finance tokens (DeFi) have fallen by between 30% and 60%.
The fall in altcoins worsened when Bitcoin shot up from USD 9.981 to USD 11.179 from September 9-19 and during this period there appears to have been a large movement to withdraw profits. Analysts believe that the gains in altcoins and DeFi were transformed into Bitcoin and stablecoins.
As such, while Bitcoin saw a strong upward trend, DeFi’s tokens fell and altcoins remained in steady decline.
The massive sale of altcoins occurred when Bitcoin began to fall after rejecting a key resistance level at USD 11,100. Over the past 15 days, the BTC has fallen almost 6%, stabilizing slightly above the USD 10,500 level.
According to Cointelegraph contributor Michael van de Poppe, the current decline is unlikely to end soon.
In a tweet, van de Poppe published the following chart and explained that the crypt currency markets often see „boring and corrective“ phases during the fourth quarter. Traders said that historically, Ether, bottoms out in December and begins to move in the next quarter.
Van de Poppe predicted that „BTC’s dominance will increase, to have an alt-season in the first quarter of 2021“.
A pseudonymous trader known as „Loma“ expressed a similar sentiment. He said that the last time the altcoins sank this hard, BTC experienced a big drop in a short period.
This time the altcoins are falling, while BTC and Ether are relatively stable above their respective support levels. The trader noted:
„The ALTs are falling right now while Bitcoin is barely moving. Last time I saw that, Bitcoin painted a thick candle.
Is there a recovery move among the jokers?
Since the beginning of October, the crypto market has been facing a series of negative events that could affect investor sentiment.
On September 26th, the exchange, KuCoin, was hacked for USD 281 million and while the price of Bitcoin was not affected by the news, it may be preventing the creation of an upward momentum. This was followed by the US Commodity Futures Trading Commission (CFTC) filing charges against BitMEX for violating the Bank Secrecy Act on October 1.
Then on October 2, US President Donald Trump tested positive for COVID-19, causing a stir in the traditional and cryptoactive markets.
Following these important events, investors expect more volatility and some traders suggest that a small contraction could occur.
Another popular Twitter trader known as „Byzantine General“ said that the time is „perfect“ for a small contraction, as it would scare away weak hands. The trader also hinted that, in his opinion, there is a lot of capital on the sidelines within the crypto market. He said:
„With all the uncertainty that exists at the moment, especially in crypto currencies, it would be the perfect time to exploit and leave all those weak hands behind. By the way, the SSR is still historically low, which means that there is a lot of gunpowder in the side lines“.
In general, traders expect a dull quarter for Bitcoin and altcoins, but last month’s intense liquidation could eventually lead to a recovery move.