Bitcoin is enjoying a ride with the price now above $11,000. For the first time, the largest digital asset has broken its long-standing trendline resistance that dates back to mid-December 2017.
Even Bitcoin dominance has started to recover, which isn’t good for altcoins that have been enjoying a rally for the past few weeks, although a handful of small-cap cryptos are still enjoying gains.
$BTC dominance with a massive bounce right near the horizontal support. If this continues it will be bad for alts. pic.twitter.com/vz2hQCckmG
— IncomeSharks (@IncomeSharks) July 28, 2020
But bitcoin uptrending is not the only reason why altcoins are moving in the opposite direction to the largest digital asset. CMS PRIME shares,
“The biggest and most important is people were overweight alts and under weight btc.”
Moreover, there was a “sudden need” for margin as positions get stretched and under collateralized positions get shocked. Bitcoin is also the reserve currency, so people have to sell and get collateral in.
“In short altszn bred complacency in btc and then a mad dash to catch up,” and the same is true in reverse.
Breaking Out
Although some of the best performing altcoins like Chainlink (LINK), Tezos (XTZ), VeChain (VET), Ampleforth (AMPL), Aave (LEND), Kyber Network (KNC), Balancer (BAL), and many others recording losses in the past week, some of the top cryptocurrencies started making gains this week.
Bitcoin’s run-up even managed to push Litecoin into the green, resulting in the digital asset breaking out of its multi-month accumulation range. The 8th largest cryptocurrency would soon revisit its long-standing downtrend trendline resistance dating back to mid-Dec. 2017 on breaking of which, “LTC could enjoy a new bull trend.” Analyst Rekt Capital said,
“LTC will soon approach its own trendline resistance, dating back to mid-December 2017. It’s difficult to think that LTC won’t follow BTC & fail to break it.”
Other bad performers recording gains this week include Bitcoin Cash, which is up 27% this past week, BSV 23%, and EOS 20%.
The third-largest cryptocurrency XRP also finally made some moves. This digital asset is still down 94% from its all-time high but jumped nearly 22% this past week, and is currently trading at $0.24.
These gains came amidst the news that Ripple partner Japan’s SBI Holdings is using R2’s enterprise blockchain Corda to issue its new S coin. In other news, Ripple announced the launch of Payburner, a P2P payment platform based on XRP.
Ripple CTO David Schwartz also shared in a recent interview why they decided not to build smart contracts into the XRP Ledger. He said,
“We were right that adding smart contracts makes a platform worse for payments. And we were right that it would introduce fee instability, performance issues, and have lots of attack surface.”
“Ethereum was wildly successful and for good reasons.”