Cryptocurrency is still in its infancy. Evaluation is difficult especially for younger coins as they take time to develop. The reality is something will always supersede the current best. Not to say bitcoin will fail but it will one day have to face the reality that there is something that can replace it. I do not know what that altcoin is but gut tells me bitcoin will not survive in the long run.
The current up and down is people trying to maintain bitcoin as an asset but in reality cryptocurrency is right now only liquidity. It can not hold a stable value so not many long term investors. People can trade fiat to bitcoin daily without losing a lot but to hold it for weeks or longer seems dangerous right now if one expects it to rise it may not for a while.
Most of the valuation now is because of speculation. I would be ok with it if there were say 100s of projects. But with 1600+ projects I don't think it is sustainable. Projects shouldn't do an ICO until it is required. For getting visibility and adoption they always have the option of airdrops. Only when they have proven a few things or have a working product they should ICO.
I am not a bitcoin maximalist. But I think it will maintain its number one position for quite some time.