Will altseason begin after Binance reopens?

15 May, 2019
by Will Heasman
Analysis
Will altseason begin after Binance reopens?

With the imminent reopening of the Binance’s deposits and withdrawal functions a few hours away, Chepicap takes a look at the potential outcomes and impacts to the market. Will we see Bitcoin fall? Or will this mark the beginning of altseason?

Why is Binance so important?

Binance is a hugely significant player within the crypto market, it stands as one of the biggest altcoin markets and one of the exchanges with the highest volume in terms of Bitcoin (BTC) trades. In fact, a report by Bitwise into the reality of trade volume within the worlds largest crypto exchanges revealed that as much as 40% of all global BTC trades are made through Binance alone.

This gives further credence to the idea that Binance could seriously impact the wider market, so what’s going to happen?

The alt season theory

There are a few ideas about what might go down later on, but the most permeating of all is the idea that altcoins will exhibit a rise due to an influx of fresh capital. Thanks to the reopening of deposits, traders suggest that recent gains from BTC will flood into the alt market.

This is also egged on by the current perception of a price disparity between BTC and altcoins, with the consensus being that altcoins are relatively cheap in comparison.

As confidence rises following the recent gains of Bitcoin, it’s almost inevitable that altcoins will share some of the action, especially as BTC starts to slow down; with investors likely looking to hop into the often more profitable altcoins.

As the theory suggests, investors seem to be waiting for deposits to reopen in order to shift some of these BTC gains into altcoins in preparation for what they believe is the start of altseason. 

However, a few have also noted that this flow into alts will inevitably and adversely affect BTC as money flows out of the #1 and into alts.

Supporting this theory is today’s sudden decrease in Bitcoin dominance, which has fallen by 2% today, a record breaking daily decrease:

This shows a clear bias towards altcoins as the tides shift into their favor.

 Will history repeat?  

Traditionally, alt season has always followed after a pump from BTC, often occurring once Bitcoin’s settles into a sideways motion.

The last time this phenomenon occurred was back in 2018, following Bitcoin’s monolithic bull run in which it teased $20,000. The fallout of which saw value transfer into alts, with everything from high to low caps pumping beyond belief.

One such prominent altcoin rise was exhibited through XRP which saw a massive 1300% rise within the space of 3 weeks. 

XRP/USD Chart provided by Tradingview

it looks as though all the stars are aligning for altseason today, but in this market and with the current climate, anything is possible. Whatever happens today, keep your wits about you.

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