Data shows traders rush to buy altcoins as Bitcoin dips to $50,000

Bitcoin’s recent decline has temporarily pulled its market dominance down to 49.5%, its lowest level since August 2018. This has led to a growing number of traders predicting that altcoins will outperform Bitcoin in the short term.

Altcoin price action appears to be moving away from Bitcoin over the past few months. In the case of Ether (ETH), it hit a new all-time high at the time of writing, even though Bitcoin is down 20% from its all-time high.

The main factor that may have tipped the scales in favor of altcoins is the massive rise in popularity in the decentralized finance (DeFi) space. Thomas Farley, president of the New York Stock Exchange, noted in an interview with CNBC that “DeFi exchanges are doing as much, if not more, volume than Coinbase today.”

Let’s look at the fundamentals and technicals of three coins that have been on the rise over the past few months.

LINK/USDT

Chainlink (LINK) is one of the most popular decentralized oracle solutions. In order to support the rapid pace of innovation in the cryptocurrency industry, Chainlink outlined its vision for the future in its new white paper, dubbed Chainlink 2.0, on April 15.

The white paper proposes a new architecture for building hybrid smart contracts, in which a second layer network called a decentralized oracle network stores and computes data off-chain before entering it into the blockchain. This new concept allows developers to quickly build hybrid smart contracts, similar to the application programming interfaces (APIs) that developers build in the online world.

Another positive factor for LINK investors is that Grayscale announced the addition of the altcoin to its Digital Large Cap Fund on April 6. Although the allocation is only 0.87%, the inclusion could put it in the spotlight of institutional investors.

On April 2, Polkadot and Chainlink announced that Chainlink’s price feeds will serve as a Substrate oracle provider, enabling projects in the Polkadot ecosystem to integrate Chainlink oracles through a simplified library.

LINK is currently correcting its sharp rise from $23.61 on March 24 to its all-time high of $44.33 on April 15. Although the price plummeted below the moving averages on April 18, the long tail of the day’s candlestick chart shows that bulls were actively buying at low levels.

Since then, the bears and bulls have been engaged in a battle at the 20-day exponential moving average ($35.89). The bulls are trying to defend the support of 20-day EMA and start the next up leg while the bears are trying to extend the correction by breaking the support.

The slightly upsloping 20-day EMA and the relative strength index (RSI) above 57 suggest a little advantage in favor of the buyers. If the bulls can push and sustain the price above $40, the LINK/USDT pair could retest $44.33. A breakout of this resistance could start the next leg of the uptrend that can reach $50 and then $55.72.

This bullish view will be invalidated if the bears sink and sustain the price below the 20-day EMA. Such a move could pull the price down to the 50-day simple moving average ($31.42) and delay the start of the next leg of the uptrend.

BAND/USDT

Band Protocol (BAND) was first reported by Cointelegraph on Feb. 2, when its price was $11.14. Since then, the price has recovered to an all-time high of $23.30 on April 15, a gain of 109% in about two and a half months.

The protocol announced on April 15 that its oracle data is live on Google Cloud Public Data, which can be used to build traditional and hybrid blockchain and cloud applications. Band said that the integration into Google Cloud Public Data is the first of many use cases being explored with partners "to connect traditional enterprise and blockchain applications."

Band continues to build partnerships to increase its market share. In the past month, it has announced partnerships with Krystal, Equilibrium, and Polygon. In addition, one of Thailand’s largest financial institutions, SCB 10X, has partnered with BAND to become a node validator.

BAND is currently trading in a large range between $11.50 and $20.62. The bulls had pushed the price above the overhead resistance of the range on April 15 and 16, but they failed to establish their advantage after the breakout.

This suggests that bears are active at higher levels. Sellers pulled the price back into the range on April 17, trapping aggressive longs. Long liquidations could have been one of the reasons for the sharp decline on April 18, which instantly broke the $11.50 support.

However, a positive sign is that the bulls were aggressively bottom-picking on April 18 as evidenced by the long tail on the candlestick chart.

After being stuck between the two moving averages for the past three days, the BAND/USDT pair has broken out of the 20-day EMA ($17.04) today. The pair could once again move up to $20.62, where the bears might once again mount a stiff resistance.

The flat moving averages and the RSI just above the midpoint suggest that the range-bound action might continue for a few more days. A breakout and close above $21 could open the doors for the resumption of the uptrend. The next target on the upside could be $29.74.

QTUM/USDT

Qtum (QTUM) was first reported by Cointelegraph on Feb. 11, when its price was $7.59. The coin took off, hitting an all-time high of $20.72 on April 19, a 173% rebound in just over two months.

The most anticipated development is the transition from a 128-second block average to a 32-second block average, which is expected to take place via a hard fork on April 30.

On March 31, Qtum founder Patrick Dai said the protocol is working to implement Filecoin’s smart contracts through the Qtum network. On the same day, Dai teased that non-fungible tokens (NFTs) are also being worked on on Qtum.

QTUM’s Doji candlestick pattern on April 19 suggested that the uptrend might be losing momentum. The short-term weakness was further confirmed on April 20 when the price continued to move lower.

Currently, the bulls are attempting to defend the 20-day EMA ($15.08). A strong rebound off this support will suggest that the sentiment remains positive and the bulls are buying dips.

The buyers are likely to try to push the price to $18.63 and then $20.72. A breakout of this resistance will signal the resumption of the uptrend.

However, the negative divergence on the RSI suggests that the momentum may be weakening. If the bears sink the price below the 20-day EMA, the QTUM/USDT pair may slide to the 50-day SMA ($10.47), where buyers may step in to arrest the decline.

A strong rebound off the 50-day SMA might keep the pair range-bound for a few days, while a break below the support will suggest that bears have the upper hand again.