During this bull cycle, the cryptocurrency market has been surfing on Bitcoin’s crest and enjoying bullish momentum. However, investors are hoping for a seismic explosion that will push altcoins to recent highs.
In anticipation of the cryptocurrency industry, online reports have revealed that since the fall of FTX, only eight altcoins have reached a recent all-time high (ATH) against Bitcoin. A cryptocurrency analyst shared his thoughts on this topic.
Altcoins have underperformed compared to Bitcoin this cycle
On Friday, Crypto analyst Miles Deutscher common intriguing fact about the cryptocurrency market. As of November 2022, only eight altcoins have surpassed their previous ATH against the flagship cryptocurrency.
To achieve this feat, 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 do so on March 11 and that the list only includes altcoins launched before the collapse of FTX.
Deutscher explained that despite the initial shock, the news made sense to him and highlighted certain conclusions based on the peculiarities of this ride.
First, the analyst believes that asset selection dynamics have changed compared to previous cycles. Investors were “punished” for overexposure to certain sectors, such as L2 and gaming, and “rewarded” for participating in others, such as Memecoins and artificial intelligence.
In contrast, in the last cycle “you could basically go all in and beat $BTC.” According to the analyst, despite the injection of liquidity in retail, the market is likely to continue to outperform in a specific sector.
He also explained that “crypto is the attention economy” and money will flow where there is attention. As a result, even designs with the best technology will not work if there is no thrilling reason to buy.
Deutscher’s second takeaway highlights the current dilution of ATH in the market. He points out that thousands of recent products are launched every day, and “low and high FDV VC coins are launched in the billions.” These launches are apparently outpacing recent liquidity, causing altcoins to struggle with performance.
More room to catch up
The analyst’s third point explains that Bitcoin and BTC (ETH) spot funds are leading the bull market. Based on this, he thinks it’s not surprising that altcoins have “barely gained any traction so far.”
This opinion is shared by various cryptocurrency analysts and experts. Alex Krüger previously stated that this cycle was “almost entirely” driven by Bitcoin ETF dynamics.
Deutscher sees the impoverished performance of altcoins as a bullish signal as Bitcoin’s dominance has played a key role in previous cycles. According to him, this result gives “more room to catch up” and could push altcoins to previously unseen highs.
The analyst believes that the market needs another catalyst to start the real Altcoins season. Still, he emphasizes that many investors saw a record first quarter “even amid moderately bullish conditions for most alts.”
Ultimately, Deutscher believes there is still room to make large gains in this cycle “even without the breathtaking alternative season we all want.”
Featured image from Unsplash.com, chart from TradingView.com
