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Post-Altcoin Rally: Analysts Discuss What Comes After the Altcoin Boom
- Ben Cowen and Gareth Soloway analyse the crypto bull run, debating if altcoins can sustain their surge against Bitcoin’s potential rebound.
- Soloway details his trading approach, focusing on probability and emotion-driven market timing, advocating for a dollar-cost averaging (DCA) strategy.
- Cowen hints at a potential upswing for small-cap coins by paralleling their volatility and growth prospects to the Russell 2000 index’s behaviour.
In the latest video of a YouTube series titled “No Shill Zone” experienced traders Ben Cowen and Gareth Soloway, discussed the current bull run in the crypto market, focusing on the altcoin market in relation to Bitcoin dominance. Additionally, Cowen talked about small-cap coins in relation to altcoins’ recent underperformance compared to Bitcoin (BTC).
Altcoins vs Bitcoin Dominance
Altcoins have seen a surge and significant gains, but there’s a discussion on whether Bitcoin will regain its dominance or if the altcoin market can maintain its momentum. Soloway argued that altcoin dominance is already collapsing, asking “does Bitcoin start to regain its mojo?”
Cowen replied: “Every time [Bitcoin dominance] pulls back, it leads a lot of people to saying like ‘oh this time is different’… but what ends up happening is the altcoin market just ends up putting in a lower high on their Bitcoin pairs.”
Cowen suggested Bitcoin dominance will level at 52% and gain momentum from there.
On Trading Strategies
Soloway spoke about his trading strategy, emphasising that when handling data, one is tasked with distinguishing between what is probable and what is less probable. Adding that as a short-term trader his strategy is to start placing short bets when emotions run high.
I’m a DCA trader, and that means dollar-cost average… I start small and then if it goes up another X percent, I add a little bit more.
Gareth Soloway Soloway laid out his strategy, which is to DCA on the long and the short side. DCA on both the long and the short side is intended to reduce the risks associated with market timing and volatility. However, it’s crucial to remember that DCA cannot assure the market will move in a direction that aligns with the duration an investor is prepared or able to maintain their position. This is particularly true for short positions, where the risk of limitless losses necessitates meticulous risk management.
Small Market Caps Moving Next?
In a tweet Ben Cowen also suggested that just as altcoins are smaller and more volatile than Bitcoin, the Russell 2000 index, made up of smaller-cap stocks, plays a similar role when compared to larger indices like the S&P 500 in the stock market. These smaller-cap coins could potentially gain strength, similar to how altcoins sometimes increase in value relative to Bitcoin, especially if the Russell 2000 respects its current trading range.
Ben added that for the past two and a half years, altcoins have not performed as well as Bitcoin. He expects them to overtake Bitcoin’s performance at some point. Altcoins have recently hit record lows compared to Bitcoin, and a shift in Bitcoin’s trend of increasing dominance could indicate their continued underperformance, Cowen concluded.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
