The capital rotation cycle does not show any clear indications of extending into an altcoin-wider cycle.
This cycle is different. Data from the blockchain shows altcoins’ worst performance against Bitcoin. [BTC] Record. It is clear that the liquidity has not spread across altcoins but rather concentrated in a small number of high conviction sectors, while other assets are still lagging behind BTC.
For context, Altcoin’s total market cap is currently around $870 Billion, which has risen 4% in the first quarter of 2013. A recent CryptoQuant study shows, however, that 40 percent of altcoins still trade below their highs. This means that many assets are not recovering, even though some areas of the market have continued to rise.
If we look at the data from another angle, 60% altcoins remain above their highs. That suggests strength in particular sectors and assets as opposed to across the entire altcoin industry.
In a technical sense, Ethereum [ETH] The dominance of ETH has risen by over 4% in Q3, while Bitcoin’s dominance increased only by 0.7%. ETH is the biggest altcoin. Its higher capital inflows compared with BTC indicate that investors have begun to shift to altcoins.
Historically, a rise in the ETH/BTC rate during a volatile period is often viewed by many as a sign that an altcoin wave has begun to form. The altcoins still have the lowest performance against Bitcoin in history. Does this mean that liquidity is flowing to only a small number of assets? Is ETH struggling with a broader alternative coin cycle?
The rise of altcoins based on sector could be a threat to high-caps
Market analysts are pointing out warning signs in the marketplace.
It follows on from the CryptoQuant Report, which analysts urged Investors to be more “selective” As altcoins experience their biggest underperformance in comparison to Bitcoin ever. The key question for investors is if they regain their risk appetite and move back to altcoins.
In terms of technical analysis, high-capital assets continue to trade well below all-time records. Ethereum is still down 60% while Solana has fallen more than 70%. This shows that altcoins are not yet fully recovered. TVL, on Robinhood Chain, has increased by over 150% to $108 million in just 24 hours.
TVL in major high-cap eco-systems is still near its multi-month lows. It shows the actual flow of liquidity. In addition, ROBIN has seen a 30%+ gain in Q3 so far. This confirms that investors are moving to narratives with high conviction.
Ethereum’s recent performance is therefore in the spotlight.
The on-chain performance of ETH remains weak compared with Bitcoin. This suggests that the movement may be technical rather than structural. Capital flowing to select altcoin stories could continue building pressure through H2.
Final summary
- Many altcoins with high capitalization continue to be left behind.
- Ethereum has shown technical strength. However, high-caps may still be under pressure if the liquidity continues to remain selective.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: ambcrypto.com
