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Bitcoin Rising Could Stunt Altcoins as FTX Pressure Still Looms

Published September 15, 2023 1:45 PM
Nikola Lazic
Published September 15, 2023 1:45 PM

Key Takeaways

  • The crypto market is still under negative sentiment, but prices continue to rise.
  • Bitcoin has taken the lead and is likely to continue doing so.
  • Altcoins have increased, but only in their dollar value.
  • More upside is expected, but the rise might be limited

Bitcoin (BTC) has experienced a 7.4% increase since its dip below the $25,000 mark on Monday, September 11. It is currently being traded at around $26,500, while it reached $26,860 at its highest point yesterday. 

This positive trend in BTC is also being observed in alternative cryptocurrencies like XRP, ETH, SOL, BNB, etc. A key driver behind the altcoin surge has been attributed to the release of factory output data from China. Also, it can be viewed as a rebound from the recent selloff triggered by potential asset sales by the bankrupt exchange FTX

With the recent uptrend, traders who had bet against these altcoins face the risk of their positions being liquidated. When a trader’s bet goes wrong, they may fail to cover the margin requirement, leading to a forced liquidation by the exchanges. Such liquidations can, in turn, amplify the upward momentum of cryptocurrencies like SOL.

Adding to the mix, the funding rates for perpetual futures have been consistently negative since Monday. This means that there’s less bullish leverage in the market. The interest in SOL’s perpetual futures has also seen a significant boost, with the value rising by over 16%, reaching $338 million as per Coinglass.

negative funding rates

With Bitcoin’s dominance rising by 2.5% from September 7 coming above its 50% mark yesterday, will it take the lead in the next upturn to the detriment of altcoin, or will a short-squeeze result in alts gaining more momentum? 

Bitcoin vs Alts 

The price of Bitcoin has come to its key resistance level of around $26,800. This level is a significant resistance point as it is located at the intersection between a descending resistance line, horizontal resistance, significant Fibonacci, and the 200 SMA.  

Corrective increase expected
This is why we have seen a minor pullback from yesterday’s high but more upside would be expected as we are likely seeing a corrective wave to the upside with the price target of $28,200 being the optimal stopping point. 

The expected rise would be by around 6% more from the current levels, but the real question is what would come after? According to our chart analysis from July 14, we have seen the start of a larger downtrend, out of which this expected recovery would be its corrective wave. 

Another larger descending move would in that case be expected from there with the first significant zone that can serve as support, being at $22,000. 

In a descending channel

The altcoin market cap (TOTAL3) has been also showing signs of weakness and is still in its descending channel from July 14. It started this downward trajectory after retesting the horizontal resistance level at the $365 billion level and made a decrease of 18.40% measured to its lowest point on September 10. 

Now it appears that a breakout to the upside from the descending channel would be most likely seen with the target of another lower high at around $350 billion looking the most optimal. 

Altcoins decreased in BTC value

When comparing XRP, ETH, SOL, and BNB in their BTC value, we can clearly see that they have been in a downtrend and have been depreciating their BTC value since mid-July. 

On-chain data 

In this section we are going to examine the fact if the market is going to move to the upside in synchronicity or will Bitcoin lead the way with altcoins plummeting. In order to do so, let’s examine some relevant on-chain data, namely derivatives markets. 

Positive funding rate

Bitcoin’s funding rate has been on the rise since August 18 when it fell down into the negative territory. It increased from there and entered the positive range on August 21, when it started moving sideways. A dip inside the negative side was seen on September 1, but it managed to maintain above and is now once again on the rise. 

As the funding rates represent traders’ sentiments in the perpetual swaps market, positive funding rates indicate that long-position traders are dominant and are willing to pay funding to short traders. From this chart, we can conclude that Bitcoin traders are mostly bullish. 

On the other hand, this isn’t the case for major altcoins. We have already covered Solana at the beginning of the analysis, but with negative news around the FTX potential selloff, it isn’t strange why traders are bearish. 

Negative funding rate in altcoins

However, if we look at other major altcoins like ETH, BNB, and TRX, we can also see that their funding rates are negative, which indicates a bearish sentiment. Also, what we can see from the charts above is that even though the market is mostly negative it isn’t extremely negative. 

This is important to note because of the assumption of a short squeeze potentially causing a strong price shift. These squeezes come when the market reaches one-sidedness, and with the prices moving sideways from August 18, it is clearly not the case. 


Chart analysis shows that the prices of the cryptocurrencies are likely headed a bit higher from the current levels, but the sentiment is still mostly negative due to FTX. The increase expected would most likely be a short-lived one with more downside further ahead. 

Altcoins have recovered only by their dollar value as when looking at their Bitcoin value they have depreciated. With their funding rates being negative while Bitcoin’s is in the positive we can assume that in the following days, Bitcoin will see larger gains than the general market. 

This does have to mean that the capital will flow back from alts to Bitcoin, which can also be a possibility, but in the expected rise, Bitcoin will be a favored asset. 


Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

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