Bitcoin (BTC) Trend Reversal Gives Altcoins a New Chance

Bitcoin (BTC) Trend Reversal Gives Altcoins a New Chance

Source: Coin360

Bitcoin’s correction is increasingly becoming a trend reversal. But it could give new life to the “altcoin season” forecasts.

At the turn of 2020-2021, most analysts have stated boldly that this year will be the altcoin season. In their opinion, bitcoin is history, because it is an outdated cryptocurrency that no one is developing technically. But new blockchains with new cryptocurrencies will attract large investments. However, until now these forecasts have not been justified. Bitcoin grew powerfully due to institutional investments. There is no logic in these actions. Bitcoin indeed represents the oldest blockchain, extremely slow, 3-7 TPS, and energy-intensive, because it is built on the Proof-of-Work consensus. Smart contracts don’t work in it. These conditions make it unsuitable for payments and ecosystem building. But it turned out to be more important for the funds that bitcoin has proven its reliability over more than 10 years of history, and that its emission is limited, which means that BTC will only rise in price over time.

Altcoins are the next level of the cryptocurrency industry. For example, as a result of the Ethereum blockchain update, its throughput will be 100 thousand TPS. Plus, the possibility to launch smart contracts. Dozens of platforms have already been created that use the Ethereum blockchain for Decentralized Finance (DeFi) and have proven that they can completely replace the fiat financial system. It is altcoins that can replace traditional money, and this will happen as soon as developers offer a unified platform for the leading blockchains. Altcoins will provide fast and cheap payments around the world with no limits, and through DeFi, cryptocurrencies can replace traditional banking products such as loans and deposits, as well as take insurance to a new level.

However, the protracted rising of the king of cryptocurrencies has caused panic in the expert community. Some experts are ready to admit that they were wrong while forecasting the “altcoin season”. Now they say that altcoins are already overbought and their correction is inevitable. The altcoins are overbought due to the too rapid growth of BTC.

Indeed, bitcoin always pulls the market with it. And it is possible that some of the leading coins are overbought. In this case, they will undergo correction within 5-10%, after which they will continue to grow due to fundamental factors, the main of which is their functional usefulness. The more far-sighted experts note that institutional investors will also come to the altcoin market. Or perhaps they are already in it and are moving funds from bitcoin to altcoins.