The State of Crypto: The Long-Awaited Alt Season Picks Up Steam; Update for January 19, 2021
by
W. Paul Alexander
for
Better Call Paul Blog
***NOTE: The coin widgets update automatically, so keep in mind any percentages I've written about in this article were so listed at press time. If there is a discrepancy between my words and the widgets, it's because of volatility since time of writing.***
[JACKSONVILLE, FL | 01/19/2020 @ 4:30 AM]
Well, folks, it looks like we are inching closer and closer to the long-awaited alt season, as Bitcoin starts to stagnate and alts start to move upward in price. Some of the stagnation could be due to yesterday's holiday (in the US, Martin Luther King, Jr. Day was 01/18), because even though crypto exchanges were active, banks were closed as were many other industries that indirectly contribute to market volatility and variations.
Could we be witnessing the beginning of alt season, though? Or is this just a momentary uptick in the price of many alts as a response to Bitcoin's rapid profits. I mean, I was looking at my past notifications today and saw a notification just 46 days ago explaining to me that BTC had just crossed $19000, so I think that we should put things into perspective a bit -- that's a massive amount of created wealth in a very, very short period of time. The rest of the markets have to adjust, and that's exactly what has been happening w/Bitcoin's correction and stagnation around $35k-$36k.
Think about it, though. Since March 2020, when COVID panic sent the world's economy -- including crypto -- into a sharp freefall, Bitcoin has enjoyed a 1000% rally without any correction. Prices dropped as low as $3600 at one point -- just 10 months ago! I ran a series of articles throughout the year to give an idea of what returns people who invested their $1200 stimulus checks into straight Bitcoin would've experienced. I tried to keep up with these updates, too, but honestly the increases were so rapid and sharp it was almost as if there was no point, as by the time I published, they price would go up higher. In fact, I tried to repeat the process when the second set of stimulus checks went out just 2.5 weeks ago with this article series. If you read through that article,
Bitcoin was hanging around $25k -- JUST 22 DAYS AGO -- which means people who invested their entire $600 check at that point could've already turned it into around $1000. That's basically a part-time job!
In the end, though -- those who invested their initial $1200 checks back in March 2020 would have right around $12000 right now. For all of those other writers I see who have a goal of making $10K this year on crypto -- that one investment would've done it, and it would've only cost you 10% of the $10K to realize that goal. There's no other word that can be used here except for...astounding!
January 19, 2021 - Alt Season?
I. Bitcoin
So now that things seem to have calmed down on the Bitcoin front, prices are remaining rather stagnant in the mid $30,000's.
At the time of writing this, things are looking up for Bitcoin, though. At $37,285, it seems to be inching back up closer to the $40,000 mark, but it has done that several times in the last few days, which I have covered in my updates here: "A Lesson in Volatility | Better Call Paul Blog"
So what does this mean? Well, it means that The Whales are in control of the market right now, likely utilizing manipulation techniques to induce volatility while they take advantage of the FOMO that happens during a rally and the sell-off FUD that undoubtedly results in the opportunity to pick up lower-cost BTC. It's all about profits to the majority of investors, while some of us focus on use cases, mass adoption, and the future. For The Whales that seek profit over all, if they have a decent stash and are able to manipulate the price 2-3% in both directions, they can duplicate scenarios where they are profiting hundreds of dollars per coin multiple times a day, dozens of times per week. To someone holding 100 BTC, they could basically profit the value of one bitcoin at $30K with each fluctuation. It doesn't work so well for us non-whales. It is only worth it, profit and time-wise, when you have a massive amount in your stash.
II. Polkadot
Polkadot has been, by far, the best performer in terms of percentages. While it may be down a tad bit right now, Polkadot increased its value by over 100% in the last 7 days alone. Of course, this project is a popular topic written about here, so it's likely that you all are already aware of this swift breakout Polkadot is experiencing.
The only question is -- has it gone too far? I think that there is plenty of room to grow, and we will continue this trend -- at least for a little while. Many people consider Polkadot's rally this past week to be the beginning of the alt season, as it skyrocketed to become no. 4 by market capitalization.
III. Chainlink
In terms of percentages over the last week, Chainlink (LINK) is second only to Polkadot, with LINK tokens gaining about 45% over it's value this time last week. In fact, just around 20 hours ago, Chainlink hit it's all-time-high at $21.73, and has further increased to its current price of $22.21. I shifted a decent portion of my alt holdings into Chainlink last week, and I'm very happy with the Chainlink is an interesting project because it works in-between the blockchain and real-world transactions, building a bridge between off-chain transactions and the blockchain. The potential for what Chainlink can accomplish is so huge, I believe that it can be a huge contributor to the ultimate goal of mass adoption.
IV. Litecoin
I've been behind Litecoin since my entry into cryptocurrency, which I stumbled upon via faucets back in 2015. As an affordable coin that has the potential to bring decent profits and passive income due to volatility alone -- just like Bitcoin but on a lower level -- I literally have paper wallets with .35 LTC here, 2.05 LTC there, etc. These paper wallets were loaded when Litecoin was around $15.00, so they too have netted me a 1000% return over the long run.
Since it is closely grouped with Bitcoin, when LTC begins a healthy rally right after a BTC rally, it can be one of the best market indicators (for me, at least) that an alt season is about to happen. Here, we saw LTC go stagnant for a few weeks and even correct a bit, but true to form, it has gained almost 15% to right over $160.00 at the time of this writing.
Thus, I am not making any changes to how I hold my Litecoin in relation and in proportion to my other cryptos. Like I said, I've always held Litecoin in my portfolio, and recent activity simply re-affirms the hodling philosophy with LTC.
V. Ripple (XRP)
I'm not too proud to admit when I am wrong, and I ended up missing out on the XRP rebound when I temporarily traded my XRP assets when the SEC lawsuit was made public. As I noted then, I thought that XRP would survive the suit, but wasn't comfortable with that amount of risk, as the wrong ruling had the potential to completely tank this project, despite it's $14bn market cap.
So, anyway -- here we are. Ripple is riding the alt bull and has started out on what appears to be a recovery towards the $0.50 is was trading at not too long ago.
VI. Ethereum
Another indicator that alt season is approaching is the price of Ethereum, so-called the "No. 2 crypto." While its spot in number 2 is one reason Ethereum can be looked to for alt season, the true reason lies in it's Ether being the backbone of so, so many other DeFi projects, Nonfungible tokens (NFTs), ERC-20 tokens, etc. So, as the alts start to increase in value, it's only natural that the backbone that makes so many of these projects possible would also increase in value.
So, Ethereum is looking like it is going to surpass it's all-time-high pretty soon, and it's so close, a simple volatility fluctuation could make such a thing happen.
Just watch out for those gas fees. If there's any way you can get around paying them, get creative and make it happen.
The Top 10
For a more detailed look at what the top 10 cryptocurrencies are doing, here's a snippet from CoinMarketCap showing the Top 10 assets as of 01/19/2021 at time of press:
Taking a look at this chart, you'll notice that you see nothing but green for the 7-day performance column. It certainly looks like we're venturing into the alt season. Buckle up and have fun!
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References
1. https://cryptobriefing.com/key-indicator-suggests-major-bitcoin-correction-works/
4. https://www.coindesk.com/chainlink-hits-record-high-altcoins-rally-amid-bitcoin-consolidation
Image Credit: CoinMarketCap
