A catalyst could trigger an up to 50% crash in altcoins, a popular crypto analyst predicts
A widely-regarded crypto strategist says a catalyst could trigger an epic meltdown in altcoin markets.
Pseudonymous analyst altcoin Sherpa tells his 195,700 Twitter followers that he’s keeping an eye on the Bitcoin (BTC) dominance chart (BTC.D).
BTC.D tracks how much of the total crypto market cap belongs to the crypto king.
According to the analyst, if BTC.D respects the resistance at 48.20%, altcoin markets could see rallies as Bitcoin is likely to consolidate in such a scenario.
However, altcoin Sherpa warns that altcoins could collapse if BTC.D breaks out towards $25,000 as a result of bitcoin crashing.
“BTC.D: If bitcoin dominance wanes, we will see an altcoin run. This would result in BTC continuing to fluctuate and stay healthy; DO NOT test the $25,000 mark. If $25,000 comes in, altcoins will take a 20-50% drop from here.”
Source: Altcoin Sherpa/Twitter
A bearish BTC.D chart suggests altcoins are appreciating faster than BTC. Meanwhile, a bullish BTC.D chart suggests that the crypto king is rising faster than altcoins, or that altcoins are depreciating more than Bitcoin.
Sherpa also predicts that if BTC breaks below the support at $26,525 on the high timeframe (HTF) chart, Bitcoin is likely to retest $25,000.
“BTC: Let’s see if I actually follow my own advice and charts that I analyzed weeks ago. Unless we see a strong rebound here, I think $25,000 is next.”
Source: Altcoin Sherpa/Twitter
Altcoin Sherpa adds that several key Bitcoin technical indicators are converging at the $25,000 level.
“$25,000 is a big impact for bitcoin.
200-week EMA (exponential moving average)
200-day EMA
.382 Fib (Fibonacci retracement level)
Range high and S/R level (support/resistance).
That means when these things disappear, the value is usually lower than we expect. I wouldn’t be surprised to see $23,000 or so if that range is lost.”
Source: Altcoin Sherpa/Twitter
At the time of writing, Bitcoin is trading at $26,705.
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