- Altcoins could continue to be undervalued against Bitcoin, as market patterns have changed.
- Solana could be a reason for the market capitalization of altcoins not forming lower lows
Altcoins underperformed compared to Bitcoin Bitcoin (BTC) This year, most of the top 10 altcoins will be launching. Binance Coin (BNB) You can also find out more about the following: Toncoin (TON)They have failed to achieve their former highs.
According to Andrew KangPartner at Mechanism capital, says the market’s patterns have changed. Altcoins have historically followed Bitcoin whenever it reaches a new high. However, altcoins did not follow suit when BTC broke the $73,000 mark on charts earlier this year.
“Altcoin market caps (and ETH) should be making new highs in new cycles. It’s increasingly clear that this is not the case… Even if Bitcoin goes to new highs this doesn’t mean altcoins will keep up.”
Blockchain Center’s data revealed that Bitcoin was outperformed in 90 days by just 11 altcoins.
Blockchain Center
ETH reaches a new low against Bitcoin
Kang released his analysis after Ethereum formed a low for the year against Bitcoin. This occurred on August 9. The ETH/BTC chart revealed the altcoin’s largest lows have been lower since last October.
ETH also has not bounced off the Bollinger middle band (20-day simple moving average) since July when spot Ether ETFs began trading. It is yet another indication of poor performance.
TradingView: Ethereum/BTC
Kang believes altcoins are likely to reach a bottom by 2025 before making a strong rebound.
Solana as the safety net?
Kang is not satisfied with this. Solana (SOL) The only reason altcoins market cap hasn’t dropped below $1 trillion on charts is because it doesn’t have a low.
Since March 2024, Solana had defended the $125 monthly support.
TradingView Source: SOL/USDT
This psychological price of $125 is crucial to monitor, because it showed SOL had established a base that was stable and prevented steep drops despite the downward pressure.
The Relative Strength Index (RSI) has also sustained levels above 30 since March – A sign that SOL has not been oversold for an extended period.
The trend showed that the buyers had avoided a significant risk of a downside. The strong demand for SOL confirms Kang’s theory that Solana is unlikely to make a lower bottom.
The Futures Market also showed a near-balanced sentiment by traders around SOL. At the time of press, SOL’s long/short was 0.97. This means that short positions were slightly more than long ones.
Coinglass
Nevertheless, Solana’s Strength hasn’t been enough to sustain the altcoin markets. Altcoin Season Index value was 22, indicating that Bitcoin is currently the most popular altcoin.
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Source: ambcrypto.com
