In the past 24 hours, Polkadot price has surged over 16.83%, even recording an all-time high price today at $7.64. Polkadot (DOT), currently ranks sixth by market capitalization, which is at over $6.8 billion.
Large-cap altcoins triggered bull runs with Bitcoin
The cryptocurrency market as a whole is in a great place. Start-ups are booming, venture capital is investing heavily, and buying pressure in the smaller more illiquid altcoin space is picking up significantly. As altcoins begin to show signs of newfound momentum, traders are becoming even more confident in the strength of BTC’s trend.
Bitcoin triggered strong rallies in large-cap altcoins like Litecoin and Dogecoin. Many analysts say the surge in large-cap altcoins is directly connected to Bitcoin’s price action and historical data shows the two tend to move as partners when BTC goes through bull and bear cycles respectively.
Altcoin season with a re-ignited rally
Historically, after a major Bitcoin rally, altcoins that existed in 2011 to 2014 tend to surge. These cryptocurrencies include the likes of Litecoin, Dogecoin, and XRP. One of the major reasons behind this altcoin rally is volume. Traders like to pump up altcoins, causing the volume to spike within a short period.
Historically, when BTC surges, altcoins tend to rally with larger upside price movements. Altcoins usually become stagnant when Bitcoin enters price discovery because BTC sucks up the volume from the altcoin market dominance.
Moreover, when Bitcoin is surging rapidly, it is also prone to large short-term pullbacks. The problem for altcoins is that when BTC rises, they fall behind BTC, and when BTC pulls back, altcoins typically see even larger corrections.
In the foreseeable future, it is critical for the altcoin market to see Ethereum gain momentum against Bitcoin. This would likely kickstart the next altcoin season if one emerges in the near term. As such, the ideal scenario for the altcoin market is to see the ETH/BTC pair bottom out and then break out for altcoins to see renewed momentum.
Since these cryptocurrencies have significant historical relevance, when a rally starts, their momentum typically lasts longer than other obscure, smaller-cap altcoins.
Polkadot Price All-time high to be continued
Polkadot price has surged by over 425 in the past week, setting one of the highest rallies in the altcoin market, compared to the other large-cap cryptocurrencies. Other large-cap altcoins have also seen surges in their prices, including Litecoin, which climbed over 13% in the past week.
Cardano has also seen a rally of almost 20% in the past week, taking its price to $0.182. Binance Coin (BNB) has also seen a huge surge in its price recently, even making a new all-time high on its own exchange at over $39.6.
Read Also:- Litecoin Flips XRP to take the 4th Spot
Altcoins in 2021
The altcoin is expected to outperform Bitcoin and Ethereum in 2021. Crypto traders are predicting that one altcoin will be the best performer next year, eclipsing the potential gains of heavyweights such as Bitcoin (BTC), Ethereum (ETH), and XRP.
Altcoins get more popular in bull markets as time goes on and people perceive the risk-reward in the short term on bitcoin investments to be getting substantially worse. Altcoins are highly speculative, they can lose 10% of their value one day and gain 40% the next. This is due to the illiquid nature of the market.
As an altcoin grows in price, the price stabilizes and the market becomes easier to predict and trade. In the early days for most projects, this is when they are at their most volatile.
According to top industry analysts, the SEC is “sniffing” around other altcoin projects and companies, and could continue to take shots at the industry throughout the new year.
With Bitcoin having surged 156% year-to-date (YTD) in 2020, there is clearly a growing interest in the crypto asset class among investors. We believe that asset class diversification is important. And clearly, cryptocurrencies are here to stay. Therefore, it makes sense to allocate some funds to alternative coins (altcoins).
We believe that 2021 is a great time to be investing in the altcoin space, in specific projects that we expect will perform well. In the altcoin world, there are thousands of names to choose from. So, it makes the most sense to invest in coins that are backed by a strong business plan.
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