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Altcoins have been severely underperforming Bitcoin throughout the course of its latest push higher. This has caused many cryptos to form bearish technical structures against their BTC trading pairs that could force them lower in the days and weeks ahead.
Analysts are now noting that this trend of underperformance is unlikely to subside anytime soon.
This potential near-term weakness could come about as a result of Bitcoin pushing higher in the days and weeks ahead, with its next upside movement potentially being driven by investors siphoning funds away from alts and into BTC.
One analyst is now noting that he believes “max pain” is still ahead for many altcoins – a possibility that could soon come to fruition as BTC flashes some signs of short-term weakness.
Altcoins Struggle to Match Bitcoin’s Momentum as Halving Hype Grows
Bitcoin has been caught within the throes of an intense bull rally throughout the past several days and weeks.
The momentum stemming from its mid-March rebound from lows of $3,800 has been rather intense, leading the crypto to push all the way to highs set within the lower-$10,000 region earlier this week.
Although altcoins typically track Bitcoin’s price action and push alongside it, this time has been different, as the aggregated crypto market has struggled to match the momentum seen by BTC.
This has caused many of them to form highly bearish technical formations against their BTC trading pairs, with some analysts previously noting that major altcoins like Ethereum could be poised to see notable downside.
This weakness likely stems from investors flocking to Bitcoin in anticipation of its halving event.
The 50% block rewards reduction stemming from this event are largely thought to reduce the selling pressure that miners place on the digital asset.
There is still significant debate as to whether or not this will actually help boost the crypto in the near-term, as historical precedent shows that BTC often faces a sharp post-halving selloff.
Smaller Cryptos Yet to See Their “Max Pain Scenario” as Weakness Grows
One crypto analyst explained in a recent tweet that he believes there are still fresh local lows to be set in the days and weeks ahead.
“When BTC corrects alts are really going to struggle. Most selling off very quickly atm. Would assume many will hit new lows on the BTC pairs after the next correction. Will look to pick a few up then. Absolutely brutal. Still max pain ahead imo,” he noted.
Image Courtesy of Pentoshi
If investors continue funneling capital into Bitcoin in anticipation of further pre-halving and post-halving bullishness, the aggregated crypto market could soon be subjected to significantly further downside.
This decline could also be perpetuated if BTC doesn’t see the explosive upside movement that many crypto investors are anticipating.
Featured image from Unplash.