Today Santiment posted a chart that would show how Bitcoin looks more attractive than altcoins right now.
📉 As prices gradually fell on Sunday, traders have shown that though they may proclaim to be #buyingthedip, they are #shorting more on these mini drops. Interestingly, this only applies to #altcoins right now, indicating that #Bitcoin is being flocked to as the safe haven. pic.twitter.com/4bikBRij5j
— Santiment (@santimentfeed) June 27, 2022
Why is Bitcoin performing better than altcoins?
The key point is the attitude of traders.
In fact, these days it seems that traders are mostly opening short positions on altcoins instead of buying the dip. This phenomenon, however, is not observed on Bitcoin, but only on altcoins.
Short positions belong to those who bet on declines, and as of yesterday apparently many traders are ready to bet on further price declines.
Until the day before yesterday, this phenomenon was not observed, while it began to manifest itself only yesterday, and only on altcoins.
It is worth noting that yesterday the overall market capitalization of cryptocurrencies rose, as did the price of ETH which has been rising for four days now.
Despite these small upward movements, traders seem to be betting on further declines.
The price of Bitcoin has not made any significant movements for a couple of days, so there may be a disconnect between the altcoin trends and the BTC trend underway.
When comparing the trends over the past few months in the price of BTC and ETH, it can be seen that they have pretty much gone hand in hand. In fact, they have been proceeding almost side by side for more than a year now.
Santiment, however, suggests that as of yesterday a disconnect may have begun, not yet visible on price, but appreciable in terms of traders’ attitudes.
It is worth remembering that in the past, Bitcoin has always held up better during bear markets than altcoins, although, for example, ETH has always performed better during bull runs.
The approach to Bitcoin and other cryptocurrencies during past bear markets
Moreover, Bitcoin’s dominance is still decidedly low, at less than 41%. This level is perfectly in line with that of June 2018, which was the year when the previous major bear market began. In July it rose above 45%, in August above 50%, and in September to 55%.
This increase was not due to any particular increase in the value of BTC, but mainly to a further loss of altcoins. At this point, a similar phenomenon might be imaginable this year, with the disconnect just beginning and a more pessimistic near-term future for altcoins than for Bitcoin.
As Santiment points out, Bitcoin is perceived by traders as a safer asset than altcoins, even after the crashes of recent months. This may not so much favor BTC, but more importantly disadvantage altcoins, many of which are already suffering greatly.
For example, during 2018 the price of ETH fell from highs of $1,300 to lows of $80, a vertical collapse of 94% in less than a year. During the same period BTC went from highs of $20,000 to lows of $3,200, a loss of about 85%.