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About ten days ago there was the fourth Bitcoin halving: following this, some altcoins have outperformed BTC in terms of price, to the point that there are some predictions suggesting that there could soon be another favorable moment for the crypto markets.
Furthermore, often in the past altcoins have started to outperform Bitcoin after the halving, also because the anticipation for the halving itself generally brings optimism on BTC, but the optimism due to the anticipation obviously dissolves once the halving has occurred.
Summary
Bitcoin and altcoins: forecasts for the crypto market
There are at least three indicators that can be used to examine and synthesize the comparison between the performance on the crypto markets of the price of Bitcoin and that of altcoins.
The first indicator, and probably the most important one, is related to dominance, which is the percentage of the total market capitalization of the crypto market occupied by that of BTC.
Referring to the specific TradingView chart, it can be observed that since the beginning of the year, Bitcoin dominance had risen from 51% to 54% in the first days of January, just before the launch of the new Bitcoin spot ETFs on US exchanges. After dropping back to 51% at the end of January, it started to rise again until reaching the annual peak of 57% on April 13, exactly seven days before the halving event.
Although these may seem like minor movements, they are actually important movements, because crypto markets often tend to move all together following the price movements of BTC.
Since then there has been a decline, which reached its peak last Sunday, with a return to 54%.
However, there was a small rebound in the dominance of Bitcoin, which returned to almost 55%.
So after the all-time high pre-halving, a phase began, lasting more than a month, during which overall altcoins performed slightly better than BTC in terms of price, although dominance remained at high levels like those of early January.
Ethereum’s performance
The other two indicators are closely related to each other, and are the ratio between the market capitalization of Ethereum and that of Bitcoin, and the price of ETH expressed in BTC.
At this moment Bitcoin capitalizes 3.2 times the capitalization of Ethereum, while on April 13th it had reached 3.5 times. At the beginning of the year it was about 3 times, so Bitcoin has performed significantly better than Ethereum until a couple of weeks ago, while in the last 15 days ETH has outperformed BTC in terms of price.
However, the analysis of the price trend of ETH expressed in BTC is even clearer.
At the beginning of the year 1 ETH was worth about 54 thousandths of BTC.
Until January 9th this price dropped, because Bitcoin was outperforming Ethereum ahead of the ETF debut on the stock exchange. The minimum peak in January was 48 thousandths, but on April 13th ETH had also dropped to 46 thousandths of BTC.
The most interesting thing is that on Sunday it had dropped to 52 thousandths, which however are still much less than the 60 thousandths of mid-January. This suggests that there has been a rebound of ETH against BTC in the past two weeks, and that Ethereum may have the strength at this moment to continue to outperform Bitcoin in the short term.
Bitfinex Analysis
Yesterday the 102nd analysis of the crypto markets by Bitfinex Alpha was published.
Even Bitfinex analysts point out that ETH and altcoins have outperformed BTC after the halving, but they add that this trend is in line with previous halvings.
Specifically, the cause would be investors and speculators seeking higher returns elsewhere, now that it is believed that the price of Bitcoin may have exhausted the first phase of the bull run.
In addition, ETH often anticipates the movements of altcoins, and since in recent weeks it has been experiencing significant growth despite regulatory obstacles, a series of signals are beginning to emerge suggesting that a small altseason may be starting.
In reality, according to Bitfinex analysts, there are also good signals for Bitcoin, but the recent strong performance of ETH compared to BTC also suggests a receptive market towards altcoins.
The analysts at Bitfinex commented on their analysis by saying:
“Historically, after Bitcoin halvings, attention often shifts towards altcoins, which tend to strengthen and gain market share. This shift occurs because the reduced growth rate of Bitcoin’s supply is seen as a long-term bullish development, increasing investors’ risk appetite and leading them to seek higher potential returns from alternative cryptocurrencies. This halving doesn’t seem to be any different.”