Altcoins
Altcoins drop 70% against Bitcoin: this is why they just can’t move forward
Bitcoin‘s (CRYPTO: Bitcoin) the recent rally near all-time highs failed to spur an equivalent rally in altcoins, a sign that the market is away 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 is euphoric right now,” he tweetedpointing out that while Bitcoin is approaching its all-time highs and meme coins are gaining traction, the reality is different.
“Most retail stores don’t hold large amounts of Bitcoin – they’re at a premium. And the alternatives have significantly underperformed 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 the FTX bust, only eight coins have reached a new all-time high against Bitcoin. Notably, the list does not feature major altcoins such as Solana (CRYPTO: SOL), Ripple (CRYPTO: XRP), Cardano (CRYPTO: ADA), Polka dot (CRYPTO: POINT) or also Ethereum (CRYPTO: ET)
This underperformance is further highlighted by the fact that cryptocurrency-related YouTube views have significantly lagged 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% away from previous highs versus Bitcoin, noting that altcoins have “not had a sustained rally” since Bitcoin’s upward push that began in October 2023.
Read also: Bitcoin collapses to $67,000 and “this move is not over”, warns the analyst
Because matter: Deutscher attributes the current market dynamics to several factors.
- He describes the cycle as driven by the Bitcoin narrative, driven by the spot ETF narrative and strong inflows.
- Specific sectors such as memes, artificial intelligence, and real-world assets (RWA) have outperformed, while major altcoins have lagged.
- Market dilution is at an all-time high, with nearly 1 million new crypto tokens created in May alone.
- Finally, token unlocks are adding continued selling pressure, with around $200 million in unlocks per day.
Addressing the future of the market, Deutscher hypothesized a potential trend reversal. 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 cyclical acceleration and macroeconomic conditions.
“During the first half of the cycle it is natural for Bitcoin to take the lead. In fact, this is HEALTHY for the market structure,” he said, noting that altcoins typically outperform in the late stages of the run.
Cryptocurrency trader Cred Also he intervened with an analysis of the non-uniform distribution of returns in this cycle. He pointed out that traditional risk curves and market behaviors have been less profitable, with blockchain meme coins like Solana instead taking the lead.
“The rising tide has not lifted all boats and there are very clear winners and losers,” Cred noted, highlighting the challenges faced by traders with different strategies and risk appetites.
Eugene Ng Ah Sioanother crypto analyst, summary cycle progression, detecting significant price movements in late 2023, followed by a reset in early 2024 and a large deleveraging event in Q2 2024.
He underlined the mental strain of market participants and suggested a possible intermediate cyclical bottom in June, with better prospects for the second half of the year.
What’s next: As the crypto community navigates these turbulent times, upcoming events like Benzinga’s The future of digital assets November 19th will be crucial.
Industry leaders will gather to discuss market trends, regulatory impacts and future predictions, offering valuable insights evolving landscape of digital assets.
Read next: Cryptocurrency adoption is progressing “slowly and steadily,” the research report says
This content was partially produced with the help of artificial intelligence tools and was reviewed and published by Benzinga editors.
Image: Shutterstock
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