Altcoins have finally joined the current Bitcoin rally, signaling a shift in investor sentiment towards risk. This week, altcoins rallied after falling behind Bitcoin in its climb to new 2023 highs.
While Bitcoin hit an 18-month high and Ethereum surpassed the key psychological $2,000 level for the first time since April, the real gains were made in the rest of the crypto market. Solana gained 40% weekly, MATIC token gained 25% and Cardano gained 17%. In comparison, Bitcoin and ETH are up 8% and 15% respectively on a weekly basis.
Rob Ginsberg, an analyst at Wolfe Research, noted that the crypto space has been a one-man show largely led by Bitcoin over the past year, with Bitcoin leading the upside rush while ETH and altcoins have struggled to catch a bid. However, that is no longer the case as altcoins have woken up over the past two weeks and joined Bitcoin's rally.
Investors are now watching to see whether the gains will continue or if this is just a brief moment of risk. Ginsberg added:
“Most altcoins are in oversold territory and this is part of long-term trends, but serious recovery cannot be ruled out. “Many of the moves are parabolic, so we will be watching to see if a more meaningful regime change is afoot or if they succumb to overbought conditions.”
Bitwise Asset Management analyst Ryan Rasmussen stated that it is normal for ETH and altcoins to rise during periods when Bitcoin rises:
“Historically we have seen Bitcoin rise, then Ethereum, then altcoins, and this pattern appears to be repeating as this bull market heats up.”
JPMorgan's Nikolaos Panigirtzoglou said the current ETF-driven rally “seems quite exaggerated.” He also touched on the upcoming Bitcoin halving, expected in the spring of 2024, which is designed to reduce the cryptocurrency supply and has historically signaled the start of the next major bull run in crypto.
However, the analyst does not find this bullish argument convincing, as the Bitcoin halving event and its impact are predictable and well incorporated into the Bitcoin price, according to the analyst.
*This is not investment advice.