During this bull cycle, the cryptocurrency market has been riding the top of bitcoin and enjoying the bullish momentum. However, investors are hoping that a seismic explosion will push Altcoins to new highs.
Related reading
While the cryptocurrency industry waits, online reports revealed that since the FTX crash, only eight altcoins have reached a new all-time high (ATH) against bitcoin. A crypto analyst shared his opinion on the matter.
Altcoins Underperform bitcoin This Cycle
On Friday, cryptoanalyst Miles Deutscher x.com/milesdeutscher/status/1796432681623802225″ target=”_blank” rel=”nofollow”>shared An interesting fact about the cryptocurrency market. Since November 2022, only eight altcoins have surpassed their previous ATH against the flagship cryptocurrency.
To achieve this feat, the tokens include Render (RNDR), Tellor (TRB), Injective (INJ), Astar (ASTR), SSV Network (SSV), SingularityNET (AGIX), True Wallet Token (TWT), and Binance Coin (BNB ). ).
It is worth noting that RNDR was the last to achieve this on March 11 and that the list only contains altcoins launched before the FTX collapse.
Deutscher explained that despite his initial surprise, the news made sense to him and highlighted some conclusions based on the singularities of this race.
Firstly, the analyst considers that the dynamics of asset selection changed compared to previous cycles. Investors have been “punished” for being overexposed to certain sectors like L2 and gaming and “rewarded” for participating in others like Memecoins and ai.
By contrast, in the last cycle, “you could basically bet on anything and beat $btc.” According to the analyst, the market is likely to continue to experience outperformance in specific sectors despite the injection of retail liquidity.
He also explained that “cryptocurrencies are an attention economy” and money will flow where the attention is. As a result, even the best-tech projects won't work if there isn't an interesting reason to buy.
Deutscher's second conclusion highlights the current dilution of the market's ATH. As he points out, thousands of new products are launched daily, and “low float/high FDV VC coins are launched by the billions.” These releases are apparently outpacing new liquidity, causing Altcoins to have performance issues.
More room to catch up
The analyst's third point explains that the bull run has been led by bitcoin and btc spot exchange-traded funds (eth). Based on this, he does not consider it surprising that altcoins have “barely pumped” so far.
Several analysts and crypto experts share this opinion. Alex Krüger previously stated that the cycle has been driven “almost entirely” by the momentum of bitcoin ETFs.
Deutscher sees the underperformance of Altcoins as a bullish sign, as bitcoin's dominance has been critical in previous cycles. For him, this performance allows “more room to catch up” and could take altcoins to never-before-seen highs.
Related reading
The analyst believes the market needs another catalyst for a true Altcoin season. Despite this, he notes that many investors have had a record first quarter “even in slightly bullish conditions for most alternatives.”
Ultimately, Deutscher believes there's still room for big profits in this cycle “even without the alternate season we're all longing for.”
Featured image from Unsplash.com, chart from TradingView.com