There are two possible reasons for the Altcoins to drop and we are going to deep dive into these reasons.
1- Bitcoin ETF
Everyone now knows that there is going to be an ETF announcement in January and most of the traders are anticipating that ETF will be approved.
What does the Bitcoin ETF has to do with Altcoins?
Majority of the altcoins show weakness against the strength of Bitcoin. You may have seen in the past when Bitcoin moves sharp Altcoins either bleed down slowly or do nothing.
This is what is happening right now people are selling their Altcoins and moving to bitcoin in anticipation of ETF approval pump on Bitcoin. As its the ETF for bitcoin so they are betting that only bitcoin will take the advantage but in my opinion it's the win for the whole crypto market.
2- Altcoin Weekly pullbacks
Altcoins were on the up only mode for the past few weeks. Nothing goes straight up in the market, pullback or consolidations are the part of every market cycle.
Alts were going up without any pullback on the weekly scale and these move down could be part of weekly pullbacks
When the market is bullish it's very normal to see 30% to even 40% pullbacks. the number seems big but it's because of the volatile nature of the crypto market.
I have attached a few weekly charts for your better understandings how the weekly chart looks and why it needs to cool off for some time.
it's all fine as long as the market holds the bullish structure on high timeframe charts.
Right the the weekly charts look fine and that is what you should be watching during the high timeframe pullbacks. Slow bleeds are not the one you should be buying blindly The market is slowly bleeding right now There is no need to buy the weakness or DCA, wait for the market to drop into the key high timeframe areas (It will depend on each coin chart) .
Wait for the market to show some strength let the news come out and watch how the market reacts to it and then take your step.
I hope it clears and you learned something from it. I would love to hear your thoughts.
