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Our analysis of the situation
During this exhilarating bull cycle, the crypto market has rode the wave of Bitcoin’s success, reveling in the bullish energy. Yet, as the industry eagerly awaits a seismic shift to boost Altcoins to unprecedented peaks, the reality remains more muted than expected.
Reports have surfaced, revealing that in the wake of FTX’s fall, a mere eight altcoins have surged to new all-time highs against Bitcoin. Renowned crypto analyst Miles Deutscher has provided insights into this intriguing development.
Altcoins Underwhelming in the Face of Bitcoin's Soar
In a recent analysis, crypto expert Miles Deutscher shared a noteworthy revelation about the current state of the crypto market. Since November 2022, only eight altcoins have managed to surpass their previous all-time highs against the leading cryptocurrency.
The list of tokens includes Render (RNDR), Tellor (TRB), Injective (INJ), Astar (ASTR), SSV Network (SSV), SingularityNET (AGIX), True Wallet Token (TWT), and Binance Coin (BNB). Notably, RNDR was the most recent addition to achieve this milestone on March 11, and it’s crucial to highlight that these altcoins were all launched before FTX's collapse.
Deutscher outlined that, although initially surprising, the occurrence made sense to him. He elaborated on the unique characteristics of this cycle and provided insightful takeaways from this anomaly.
The Changing Dynamics of Asset Selection
Primarily, Deutscher emphasized the altered dynamics of asset selection compared to previous cycles. Investors have seemingly been penalized for overexposure to certain sectors such as L2 and gaming, while being rewarded for involvement in sectors like Memecoins and AI.
Contrastingly, in the past cycle, almost any bet placed would yield gains over Bitcoin. According to Deutscher, the market appears poised to continue showcasing specific sector outperformance despite the infusion of retail liquidity.
He added that the cryptocurrency market operates as an attention economy, where money gravitates towards the spotlight. Consequently, even projects boasting superior technology may underperform if they lack an alluring reason for investment.
The Issue of ATH Dilution
Deutscher's second observation delved into the dilution of the current all-time highs within the market. He pointed out the incessant launch of thousands of new products daily and the emergence of "low float/high FDV VC coins," which appear to be outpacing the infusion of new liquidity. This dilution has resulted in the struggle of Altcoins to maintain their performance.
A Longing for the Ultimate Altcoin Season
Lastly, Deutscher underscored that the bullish run has been primarily steered by Bitcoin and spot BTC exchange-traded funds (ETH). Consequently, the subdued performance of altcoins thus far is expected. Several industry experts, including Alex Krüger, have attested to the cycle being primarily fueled by the momentum of Bitcoin ETFs.
The Underwhelming Performance as a Harbinger of Potential Gains
Contrary to expressing concern, Deutscher views the underperformance of Altcoins as a positive indicator. He recognizes Bitcoin's dominance as a critical aspect of previous cycles and believes that it allows ample opportunity for Altcoins to catch up, possibly propelling them to unprecedented heights.
He also emphasized the record Q1 earnings of numerous investors, even during moderately bullish conditions for most altcoins. Ultimately, Deutscher advises investors that there is still substantial potential for significant profits, even in the absence of the much-desired, meteoric altseason.
In conclusion, the current state of the cryptocurrency market presents an enigma. While Altcoins have struggled to match Bitcoin's exuberant surge, Deutscher's discerning analysis offers a glimmer of hope for investors, hinting at the potential for exciting opportunities on the horizon. As the industry awaits the next catalyst to stimulate a genuine Altcoin season, the quest for the ultimate crypto high continues.
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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