Although Bitcoin has been the best performing asset of 2019, one glaring question remains for crypto HOLDers: When altcoin season? Bitcoin dominance continues to rise and the patience of altcoin investors is gradually wearing thin. CryptoMood market sentiment app detects lots of positive sentiment for most of the altcoins even though some think we’re right on the cusp, and yet others think we may never even see an altcoin cycle again.Positive news and social sentiment. Source: CryptoMood twitter
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Not Every Altcoin Will Come Back
2017 was truly the year of the altcoin. Certain alts gave astonishing, unheard of returns. As a result, a lot of people got suckered into the mania and invested in anything that sounded good. All you needed was a whitepaper and a nice idea and people would invest. Thousands, literally thousands of new projects sprung up, many of them with little to no use case. The harsh reality is that many of these altcoins aren’t coming back. For those who bought at the top, perhaps the best course of action is to simply unload the bags and move back into BTC or other altcoins. That said there will be a handful of winners in this altcoin market who actually deliver and have a decent chance to outpace Bitcoin.The 2018 altcoin capitulation left many altcoins such as XRP some 90% down from their all-time highs. Some of these altcoins will revisit past glory. Most will not.
Bitcoin Network Limitations
The main advantage many altcoins offer over Bitcoin is speed and lower transaction fees. Of course, when the price of Bitcoin is low, there’s not as much traffic on the network and thus scalability isn’t so important and fees aren’t so high as a result. But when the price of Bitcoin goes up, so does interest and usage. Then the problems of Bitcoin are exposed. In the peak of the 2017 mania, transaction fees surged 250% and some users reported the network taking days to process their transactions. In times like these altcoins can really shine, showing off their enhanced speed, scalability & efficiency compared to Bitcoin. Naturally, people will gravitate towards cheaper and faster blockchain alternatives.As the popularity of Bitcoin goes up so too does its transaction times and fees. This is when many investors will take a plunge into cheaper, faster altcoins.
Too Many Promising Projects
Between the Twitter competitor Voice from EOS, to Chainlink’s ambitious partnership with Google, to Enjin Coin monetizing the future of gaming via blockchain. There are simply too many promising projects that fulfill too many use cases for altcoins to stay down forever. Although not every altcoin will come back, there’s certainly room for more than one altcoin to succeed. A handful will emerge from the competitive market and the key to long term investing is to carefully research and pick out the best ones. The future will be decentralized, on the blockchain in many ways far beyond the world of finance. Gaming, social media, identity & privacy to name a select. Bitcoin can’t and won’t fulfill all of them. Certain altcoins will and will trigger the next altcoin cycle.Although many altcoin projects will not come back. Ambitious projects such as Chainlink have promising real life use cases and could likely see some action in the next altcoin cycle.
Just a Matter of Time
Various analysts and YouTubers have tried to predict the altcoin cycle through technical or fundamental analysis. The truth is no one knows exactly when or how it will happen. It could be in the next minute, hour, or year. Some think Bitcoin will reach as high as 80% dominance. Most analysts believe alt season will happen after Bitcoin sets new highs above 20k. If there was a way to know for sure then we’d all be rich. Although there’s no way to time the market in a surefire way. It does help to understand market sentiment and there are tools that does all the leg-work. CryptoMood app uses an unmatched AI technology to gauge market sentiment from 50,000 different sources and help compile them to give you the best early trading signals to optimize your trading decisions.
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