This week, the crypto market erupted with Bitcoin surging to test downtrend resistance, while altcoin assets everywhere exploded through their downtrend resistance and went on massive rallies. Some even went on a 400% rally, shocking crypto investors who have watched the asset class in a perpetual state of decline over the last two years.
But not everyone is convinced that the rally has legs, or even understand why the rally is occurring. Even a well-known billionaire crypto investor with his own crypto-focused fund doesn’t understand the current rally or what has changed across the crypto market that would cause such a surge.
Novogratz on Altcoin Rally: New Year, New Money, or Nonsense?
After spending nearly six full months suffering deeper losses, the altcoin market may finally be ready once again for liftoff, as many of the crypto market’s top assets, including Bitcoin, have gone on massive rallies.
Related Reading | Ready for Liftoff: Altcoin Market Cap Breaks Out of Downtrend
While the number one crypto asset by market cap, Bitcoin, is also surging alongside the other cryptocurrencies like Etheruem and Litecoin, these altcoins are greatly outperforming it on their BTC ratios. Bitcoin forks Bitcoin SV and Bitcoin Cash – even more obscure forks like Bitcoin Gold and Diamond – all exploded in value, with BSV leading overall gains with nearly a 400% rally this week on the heels of news that frontman Craig Wright uncovered new documents in a pending court case against the estate of David Kleiman.
And while the court case provided an explanation for why BSV skyrocketed, the rest of the crypto market is left scratching their heads as to why other altcoins took off this week. Even Mike Novogratz, CEO of crypto investment firm Galaxy Investment Partners and Galaxy Digital Assets, doesn’t understand the rationale behind the altcoin rally.
I’m not sure I understand the altcoin rally. Happy for those making money on it. But not sure what changed. Maybe new year, new money, new enthusiasm. Dinner in NYC for best explanation.
— Michael Novogratz (@novogratz) January 15, 2020
Novogratz knows markets. After spending time in his early career as a partner at Goldman Sachs, Novogratz moved on to Fortress Investments where he worked as a hedge fund manager for high wealth clients. From there, Novogratz entered the crypto market and is now one of the most respected figures in the space.
Crypto Community Speculates On Why Alt Season Has Returned
There are a number of theories floating around the crypto community, with some pointing to whales playing games on derivatives exchange OKEx with illiquid assets and causing FOMO buying from retail crypto traders. Other theories simply point to the market cycle restarting once again, altcoins reaching such oversold conditions, and more.
Related Reading | Psychology of a Market Cycle: Are Bitcoin Investors In Denial or Disbelief?
Market psychology could also suggest that the market – including billionaire CEO former ex-hedge fund managers – are still in the disbelief phase and can’t see past the recent bear market to realize that the selloff has ended, and a new uptrend is about to begin.