Over the past day, Bitcoin has found itself stagnating, posting a mere 1% gain in the past 24 hours per data from CoinMarketCap.
This isn’t bearish — BTC is now consolidating above the key $10,000 price point, confirming it as a support and base for the next move higher.
As Bitcoin has started consolidating, altcoins — all digital assets that aren’t BTC — exploded higher, rallying far higher than they were last week on the back of buying pressure from “FOMOing” investors.
Just look to the chart below, which has highlighted altcoins in deep green, showing that they have performed extremely well over the past seven days; for instance, XRP is up 16.5%, LINK is up 38%, Tezos’ XTZ is up 44%, and so on and so forth.
All this has culminated in a trend of Bitcoin seeing its crypto market primacy starting to slip: Since topping at 73% last year, Bitcoin dominance — the percentage of the cryptocurrency market made up of BTC — has collapsed to 61.8% as of the time of writing this.
A majority of these relative altcoin gains have taken place in the past two weeks, with dominance falling from 66.5% to 61.8% in the past 15 days.
It isn’t clear what exactly is pushing altcoins so far higher at the moment, save for technical developments in the blockchains of these cryptocurrencies, though there is a historical trend of non-BTC cryptocurrencies outpacing market leaders early into bull cycles.
Ethereum Standing Above the Rest
As seen in the chart above, Ethereum is standing far above the rest of the major altcoins, for it has posted a 28.25% gain in the past seven days alone and an over 130% performance since the $118 price seen in mid-December.
Why? Well, it seems to come down to a confluence of technical and fundamental factors.
On the side of technical analysis, the cryptocurrency has recently begun to print a flurry of positive signals.
As observed in a recent tweet from well-followed cryptocurrency trader Galaxy, the Moving Average Convergence Divergence (MACD) for Ethereum’s one-month chart has flipped from a bear to bull trend for the first time in two years, for the first time since October 2017.
“Wow bro look at $ETH pumping”
Lol stfu and zoom out. It’s just starting. pic.twitter.com/BazN3ZJsCd
— Galaxy (@galaxyBTC) February 7, 2020
The last time this indicator was seen, the cryptocurrency rallied from $300 to a high of $1,440 — a surge of just under 400% — in under six months’ time.
Other positive technical signals recently seen on the Ethereum chart include the bypassing of a key downtrend, an uptick in buying pressure, and prices breaking key horizontal resistances in and around $220.
Ethereum has also been subject to a flurry of positive news over the past few weeks.
JP Morgan & Chase is purportedly looking to merge its blockchain unit called Quorum with ConsenSys, the New York-based Ethereum-centric development studio that is behind projects like Infura and MetaMask. Trader Satoshi Flipper said the following on the potential business deal, expressing how bullish it is:
So why is this so bullish for Ethereum? Because cash is king and JPMorgan has much of it. With the pending release of 2.0, JPMorgan could desire an increased presence in the enterprise blockchain arena.
Also, the blockchain has moved closer to its 2.0 (Serenity) upgrade due to recent technological breakthroughs and Ethereum-based decentralized finance (DeFi) recently reached the milestone of $1 billion in locked value.
Long-Term Viability of Altcoins Up for Debate
While altcoins have performed amazingly well over the past few days, prominent market commentators have called the long-term viability of these assets over recent weeks.
Per previous reports from Blockonomi, Galaxy Digital’s Mike Novogratz said in a recent interview with Bloomberg that he is relatively skeptical about altcoins compared to his view on Bitcoin. He attributed this position to his view that as more institutional accounts get educated, Bitcoin will gain more of the spotlight:
“That said, I see more and more large accounts getting educated and set up to be accumulators of BTC, and believe on a risk-adjusted basis it’s the best place to bet on crypto.”
He added that Bitcoin is the only cryptocurrency with a viable and distinct use case at the moment.