Conventional wisdom suggests that BTC is about to make new highs, see the altcoins doom before it, and hear the lamentation of their bagholders. Just as it has always done in the past.

I am not going to argue that this will not happen - on the contrary - I believe that this altcoin boom will see a major correction, leading to much panic (and wonderful buying opportunities). However, this doom doesn't appear to be approaching just yet.

For now, the major alts (shown here using an average of all the margin-tradable pairs on Poloniex) are looking quite healthy. They do not appear to show the kind of weakness you would expect to see if Bitcoin was just about to paint the market red.

With this in mind, I am remaining bullish on the major altcoins for the time being. Even if BTC begins making new highs, it appears that the combined altcoin market is consolidating and will continue to outperform BTC for at least a little while longer.
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This prediction comes with some cautions:

  • The overreaching bullish altcoin market sentiment has pervaded many coins which have little fundamental value. You could compare this recent crypto boom to the dot.com bubble, where companies with no chance of ever turning a profit were valued in the Billions of dollars. When the bust eventually comes, these coins will dump first, fastest and hardest.
  • Just as the current bullish atmosphere has dragged up these 'shitcoins', it is very likely that a panic wave of negative sentiment would infect the whole market - regardless of the merits of the individual coin. I suggest all traders keep an eye on https://coinmarketcap.com/charts/ and look for signs that the combined alcoin market cap has topped out. This may happen while the alts you are tradingg still appear strong.
  • Individual coins will still follow their own cycles. Im not recommending you go long on everything, because even bull markets have losers.


This is my first idea. I'd like to hear your feedback.

P.S. I know many people think BTC is about to pop and all the alts are going to totally implode - but I haven't seen any actual TA to support this - so please let me know what I'm missing if you think I'm wrong.
Comment:

BTC has broken up and is looking towards setting some new all-time highs. The immediate reaction from the market was a sudden selloff of alts and, at this time, it appears that more selloffs may follow.

As price was touching the top of the pennant in my altcoin chart, a move down for altcoins here is entirely consistent with the pattern.

If my theory pulls through, there may be some exceptional altcoin buying opportunities to take advantage of over the next few days.

Or, naturally, I could be proven wrong and altcoin season could already be over. In which case, the sharp upward curve on the altcoin market cap here: https://coinmarketcap.com/charts/ and the absurd valuation of some of the individual coins could provide some explanation.
http://i.imgur.com/7rVT3Q8.png

Combined altcoin market cap has reached a critical point. The 20.5B level is showing strong resistance. I'll be keeping an eye on here to see if it breaks, or holds. Either way, we could be in for another violent move soon.
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Exactly my sentiment, thanks for confirming.

I believe one of the reasons is that BTC dominance is still at an all time low and the volume of BTC is still quite weak, so the high seems kind of 'artificial,' I believe people are keeping their alts partially because of this - and partially because since there is no dump of altcoins, this has kind of created a feedback effect where people think their alts are safe so they aren't afraid to keep investing. Which is cool.

Actually I'm hoping this alt season alts mature a little bit and are able to keep up with BTC even as it rises, at least proportionate to dollar value - although there's definitely a bubble right now (*cough* GNO 300m market cap *cough* golem 140m market cap, I love golem but it's a bit early.)
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twismo JackMush
@JackMush, I think many of the top 20 altcoins will continue to keep up with BTC in the long run. I think it's hard to determine whether there is a bubble based on total coin market cap. Is this fundamental indicator relevant?
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The rise of btc has encouraged anyone with their neighbour and dog to try and get on some other altcoin bandwagon hoping to turn out being the next new "bitcoin". this is why these rubbish coins are coming more valuable over time. Really this is just the start, you are almost safe putting your money in any of the major coins long term for now and expect profits
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@alfredbra, Yes, I'm inclined to agree. It seems like there's been a paradigm shift where crypto as a whole is seen as a hot investment - not just bitcoin.

But I'm fairly new to trading and the 'altcoin season' FUD encouraged me to back up this feeling with some research.
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twismo alfredbra
@alfredbra, I agree that you could just about make profits on any Altcoins long term. Many of the top 20 coins have genuine business models and development teams that could produce valuable products so I don't think its right to call them rubbish coins...
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I agree with pretty much all of this lol
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kristarling traderman47
@traderman47, Good to hear. In that case, I think I'll do a total altcoin market health checkup next.
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