Altcoins
Altcoins Down 70% Against Bitcoin: Here’s Why They Just Can’t Get Started
Bitcoin(CRYPTO: BTC) The recent rise near all-time highs has failed to spark an equivalent rally in altcoins, a sign that the market is far from an altcoin bull runaccording to a renowned crypto analyst.
What happened: In a detailed series of tweets, Miles Deutscher highlighted the significant underperformance of altcoins and the apparent contradiction in market sentiment.
“At first glance, you would think crypto sentiment would be euphoric right now,” he said. tweetedhighlighting that even though Bitcoin is nearing all-time highs and meme coins are gaining ground, the reality is different.
“Most retailers don’t hold large amounts of Bitcoin – they are alt. And alternatives have been significantly underperforming so far this cycle.
To support his claim, Deutscher presented data showing that the OTHERS/BTC ratio, which excludes the top 10 coins, is lower than it was eight months ago.
Another trader pointed out that since FTX’s bankruptcy, only eight coins have reached a new high compared to Bitcoin. Notably, the list does not feature major altcoins like Solana (CRYPTO: GROUND), Ripple (CRYPTO: XRP), Cardano (CRYPTO: ADA), Peas (CRYPTO: POINT) or even Ethereum (CRYPTO: ETH)
This underperformance is also highlighted by the fact that crypto views on YouTube lag significantly behind Bitcoin prices, with views dropping from 4 million per day in 2021 to just 800,000 per day in 2024.
Deutscher pointed out that altcoins are still 70% off their previous highs compared to Bitcoin, emphasizing that altcoins “have not seen a sustained rally” since Bitcoin’s rise starting in October 2023.
Read also: Bitcoin Falls to $67,000 and ‘This Move Is Not Over,’ Analyst Warns
Why is this important: Deutscher attributes the current market dynamics to several factors.
- He describes the cycle as being driven by the Bitcoin narrative, driven by the narrative of spot ETFs and strong inflows.
- Specific sectors such as memes, AI, and real-world assets (RWA) have outperformed, while major altcoins are lagging.
- Market dilution is at an all-time high, with nearly a million new crypto tokens created in May alone.
- Finally, token unlocks add continued selling pressure, with approximately $200 million in unlocks per day.
Addressing the future of the market, Deutscher speculated on a possible turnaround. He noted that in previous cycles, altcoins peaked 546 days after the halving, suggesting a possible peak in October 2025 for this cycle.
However, he also acknowledged the possibility of an earlier peak due to various factors such as the acceleration of the cycle and macroeconomic conditions.
“During the first half of the cycle, it is natural for Bitcoin to take the lead. In fact, it is HEALTHY for the market structure,” he said, noting that altcoins generally outperform in the later stages of the cycle.
Cryptocurrency trader Credit Also rang with an analysis of the unequal distribution of returns this cycle. He pointed out that traditional risk curves and market behaviors have been less profitable, with meme coins on blockchains like Solana instead taking the lead.
“The rising tide has not lifted all boats and there are very clearly winners and losers,” Cred noted, highlighting the challenges faced by traders with different strategies and risk appetites.
Eugene Ng Ah Sioanother crypto analyst, summary the progression of the cycle, noting significant price movements in late 2023, followed by a reset in early 2024, and a significant deleveraging event in the second quarter of 2024.
He highlighted the mental strain weighing on market participants and suggested a possible mid-cycle bottom in June, with better prospects for the second half.
And after: As the crypto community navigates these turbulent times, upcoming events such as Benzinga’s The future of digital assets November 19 will be crucial.
Industry leaders will come together to discuss market trends, regulatory impacts and future forecasts, providing valuable insights into the evolving landscape of digital assets.
Read next: Crypto adoption is coming ‘slow and steady,’ research report says
This content was partially produced using AI tools and was reviewed and published by Benzinga editors.
Image: Shutterstock
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you’ll also receive the ultimate morning update from Benzinga AND a free $30+ gift card!
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.