According to an on-chain analyst on X, Bitcoin has decoupled from other cryptocurrencies or altcoins, which could lead to a severe price downturn within the market over the next day.<\/p>\n
In a July 18 post on the social media platform X, Joao Wedson, founder of crypto analytics firm Alphractal, reported<\/a> that the Bitcoin price might witness a significant drop over the next day. The crypto analyst based his conclusion on multiple results obtained from on-chain analysis using three major metrics.\u00a0<\/p>\n First, Wedson referenced an earlier post made on X by Alphractal, saying that the market is currently dominated by long positions. According to the analyst, the effect of these long positions wouldn\u2019t necessarily last long in a market where the shorts have been liquidated \u2014 a phenomenon which also holds for the reverse case.\u00a0<\/p>\n The chart above is from the Correlation Heatmap \u2013 BTCUSDT versus ALTCOINS metric, which reads the trajectory of the two crypto categories and compares them. Using the chart as a foundation, Wedson mentioned that altcoins are decoupling from Bitcoin.\u00a0<\/p>\n When altcoins cease to follow the premier cryptocurrency\u2019s lead, the development could be subject to a couple of interpretations, which affect market sentiment. As a result, it is normal to expect increased market volatility<\/a>.<\/p>\n Wedson also referenced the Altcoin Season Index Vs Bitcoin metric, which is used to measure if altcoins are outperforming Bitcoin within a specific period. According to the analyst, this Altcoin Season Index is currently on the rise, which is typically a positive sign for the altcoins.\u00a0<\/p>\n However, if historical trends are anything to go by, a rising Altcoin Season Index might be a negative signal for Bitcoin. Wedson explained that the Bitcoin market might experience a dump, dragging along with it the currently rising Altcoins, to re-establish market balance.<\/p>\n The crypto pundit also cited the Alpha Quant Signal as an influence in his conclusion. Wedson pointed out that the metric flashed a sell, which was expected, seeing as some significant whales<\/a> recently added to the sell pressure on Bitcoin by selling a fraction of their holdings.<\/p>\nOutlook For The Altcoins<\/h2>\n