Altcoin investors and traders should consider purchasing insurance in case Bitcoin ( BTC ) experiences a major price drop.
Filbfilb is an independent market analyst who co-founded Decentrader’s trading suite. The tweet was published late Friday by the pseudonymous entity, which stated that a 30% crash on the Bitcoin market could cause altcoins drop twice as hard.
Altcoins boomed when Bitcoin reached $50,000 to $60,000 during the March-May period. Altcoins also crashed after the Bitcoin market correction, in which the price of Bitcoin fell from $65,000 to $28,000.
Filbfilb pointed out that altcoins are facing a “catchup threat,” suggesting that even a slight downside shift in the Bitcoin markets could push altcoins lower by as much as twice. This statement was made as Bitcoin prices fell to $30,173 after a 15.58% weekly downside correction.
Tweeted Filbfilb. “[Altcoins] carry significantly more downside risks than Bitcoin with [BTC/USD] potentially lows.” “If bitcoin falls, losing another 30% worst-case scenario, I would expect [altcoins] correction to do 2x worse than here.”
“If bitcoin falls further, losing another 30% worst-case scenario, I would expect alts correction to do 2x more from here.”
Bitcoin’s June and May declines lowered its year-to date performance to 5.81%. While top-cap altcoins suffered in tandem, their YTD returns were much better.
Ether ( ETH), second-largest cryptocurrency dropped by just over 60% from its April peak of $4,384. However, the YTD returns for Ether were still 141% at publishing time. Dogecoin’s YTD profits fell by almost 80% after reaching $0.76, its record high.
Altcoins offered better opportunities for profit-taking than Bitcoin. Investors could therefore offset losses in Bitcoin by selling altcoin profits to fiat or reinvesting the funds into BTC.
Bitcoin and $20K
Despite repeated attempts, Bitcoin has managed to avoid a larger pullback below $30,000 in recent months.
Many analysts, including Mercuryo founder Alexander Vasiliev see Bitcoin’s bullish resilience to be a sign that it will eventually break above $40,000 and rise back to its highs near $64,000 in mid- to long term.
Some analysts, who had been bullish about Bitcoin in the past, have changed their minds after the latest bearish correction.
CNBC was told Friday by Scott Minerd (chief investment officer at Guggenheim Partners), that Bitcoin will fall to $15,000.
Minerd predicted that Bitcoin’s price would reach $600,000.
Clem Chambers (chief executive of ADVFN.com’s financial analytics website) was also bearish on Bitcoin. He noted that Bitcoin could drop back to $20,000 due to capitulation sentiment. In his SeekingAlpha article , he stated:
“The next leg down appears to be here and it will be our final big move down, leading to another crypto winter like we’ve endured before.”
