Bitcoin (CRYPTO: BTC) has faced selling pressure in recent months while other cryptocurrencies have held strong. Crypto assets also seem to be falling with the overall markets this week. So what exactly is going on in the cryptocurrency market?
“The jitteriness that we see across general markets is also felt in crypto and we’ve seen some self-fulfilling narratives in the crypto space,” Coinshares’ Meltem Demirors said Wednesday on CNBC’s “Fast Money.”
Bitcoin Cycles: The self-fulfilling narrative she is referencing is a belief in Bitcoin cycles, which are perceived as being correlated to the Bitcoin halvening, or halving. Bitcoin halving is predetermined based on Bitcoin’s programming, but takes place approximately every four years. During each halving, the reward Bitcoin miners can earn for validating transactions is cut in half.
“Bitcoin went through its halving 18 months ago. We are now at a really critical time in that cycle narrative,” Demirors said.
Alt Season? She told CNBC that part of the selling pressure in Bitcoin could be a result of rotation into other crypto assets. Demirors said she has been seeing large flows into Solana (CRYPTO: SOL), Avalanche (CRYPTO: AVAX) and Terra (CRYPTO: LUNA), as well as continued interest in Ethereum (CRYPTO: ETH).
See Also: Was Solana Really Brought Down Again By DDoS Attackers This Week?
Bitcoin was up nearly 100% in 2021, while Ethereum was up almost 300%, Demirors noted.
“It was a great year for both of these assets,” she said. “People are now taking their profits and rotating them into other assets that might see more material appreciation in 2022.”
Demirors is referring to something that many call “alt season” or alternative season. This refers to the time in which traders and investors rotate out of Bitcoin and into other crypto assets sometimes called “altcoins.”
“I think that’s a behavior we’ve seen time and time again when it comes to crypto assets,” Demirors said.
BTC Price Action: At publication time Thursday morning, Bitcoin was down 8.01% at $43,928.83 over a 24-hour period.
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