Bitcoin’s Dip or Altcoin’s Rise? On-Chain Data Hints at Market Volatility
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According to on-chain analyst Joao Wedson, founder of Alphractal, Bitcoin's price may experience a significant drop, impacting altcoins. His analysis uses three key metrics. First, the market is currently dominated by long positions, which are unsustainable given recent short liquidations. Second, altcoins are decoupling from Bitcoin, indicated by the Correlation Heatmap – BTCUSDT versus ALTCOINS metric. This decoupling, while potentially positive for altcoins, historically precedes Bitcoin price drops, suggesting a possible market correction. Third, the Altcoin Season Index is rising, usually a bullish signal for altcoins but historically bearish for Bitcoin. The Alpha Quant Signal also flashed a sell signal, influenced by whales selling off Bitcoin holdings. Wedson's analysis suggests a possible market bottom formation, despite the ominous signs. He anticipates a period of increased volatility as the market adjusts, with potential “traps” for traders. While warning of a potential Bitcoin downturn, he remains optimistic about the possibility of an altcoin rally. Currently, Bitcoin shows a minimal price increase, while Ethereum, a leading altcoin, has experienced a notable 2.23% increase in 24 hours. This divergence highlights the market uncertainty and the potential for significant price swings in both Bitcoin and altcoins.
(Source: https://www.newsbtc.com/news/bitcoin-impede-or-support-the-altcoin-rally-on-chain-data/)
