dailyhodl.com
A widely followed crypto analyst is warning that altcoins could falter as Bitcoin’s (BTC) dominance strengthens.
Pseudonymous analyst Kaleo tells his 583,200 Twitter followers that BTC is likely to continue to gain on the Bitcoin dominance chart (BTC.D) and capture more of the crypto market cap.
BTC.D tracks how much of the total crypto market capitalization belongs to the king crypto. A rising BTC.D chart suggests that Bitcoin is putting up gains at a more rapid rate than altcoins themselves.
“Bitcoin Dominance has continued its surge after the mini alt rally we saw post-Shanghai upgrade. BTC.D is breaking back above the channel with no clear resistance until ~52%, which has been the target range we’ve discussed since December.”
At time of writing Bitcoin is worth $29,690 with BTC.D at 48.68%.
According to Kaleo, the rise in Bitcoin’s dominance will likely cause liquidity to flow from out of altcoins and into BTC.
“This means Bitcoin should continue to be a blackhole of liquidity for the market, and the majority of alts will bleed into its strength. There will obviously be outliers, and your alt still may climb in USD (US dollar) value, but BTC is clearly still king.”
The trader says that the second biggest crypto by market cap, Ethereum (ETH), will likely decline further against Bitcoin in the near term.
“ETH/BTC: ETH had a nice rally post-Shanghai upgrade, but has steadily declined since. I’m still targeting a decline toward the December 2022 targets at the beginning of this thread. Expecting to see an acceleration as BTC makes its climb from $30,000-$40,000.”
At time of writing, ETH/BTC is $0.064 ($1,923), down 1.3% in the past 24 hours. Looking at his chart, Kaleo predicts ETC/BTC will dip below $0.056 before a bounce up.
One altcoin on the trader’s radar is the decentralized exchange Injective (INJ).
According to Kaleo, INJ appears to be an outlier by continuing to show strength again Bitcoin. He predicts INJ may cross the $10 level.
“Opened a small INJ long here. I’ve missed so much of this rally it’s finally time to respect the pump. Send it to double digits.”
The crypto trader also says INJ’s pattern on the lower timeframe is similar to the continuation patterns altcoins showed in 2021.
“It’s also fun looking at LTF continuation setups like this as well. Reminds me of playing with altcoins in 2021.”
Injective is trading for $9.05 at time of writing, up 8.3% in the past 24 hours.
Generated Image: Midjourney