Looking Beyond Bitcoin

Louis Sykes
May 10, 2021

From the desk of Louis Sykes @haumicharts and Steve Strazza @Sstrazza

Alt Season is still very much alive and well.

In February, we did a deep dive into the wide world of crypto assets outside of Bitcoin. This turned out to be quite timely as many of these "alt-coins" have booked significant gains in the time since.

It's no longer just Bitcoin, Ethereum, Litecoin, and some others. There are thousands of cryptocurrencies out there now!

As this new asset class continues to grow and blossom, we continue to pay close attention to the leadership within the Crypto complex.

And one coin that we know for sure has NOT been a leader of late is Bitcoin itself. In fact, $BTC/USD has been flat since late February. Even Gold is outperforming Bitcoin over the last month!

A great way to visualize this is through Bitcoin's Market-Cap relative to its peers, or the entire space. In other words, this tells us what percentage of the total cryptocurrency market cap Bitcoin represents.

Since January, Bitcoin's dominance has taken a major hit. Once comprising over 70% of the asset class, Bitcoin is now pushing to the low 40's...

So what gives?

Should Crypto investors be worried?

This trend has been taking place for some time, and if we can recall, this asset class hasn't performed too shabby throughout this period...

It has less to do with a rotation out of the Crypto space and more a rotation between coins. More specifically, out of Bitcoin and into the Altcoins.

And this behavior is being driven by major trends and developments like DeFi, Centralized and Decentralized Exchanges, and the various Ethereum projects. Coins that have anything to do with these trends look a whole lot better than Bitcoin does recently. If this relative theme continues, we only see this as positive for the Crypto complex.

I know it's hard (I can't help but laugh when writing this), but imagine it like this: Bitcoin is the safe haven of the space, and everything else is on the opposite end of the risk spectrum.

In other words, the current price action is akin to seeing the broader stock market outperform consumer staples. In such an environment, it's normal to see just about everybody winning.

Just look at this monster base in the Ethereum/Bitcoin ratio. This is as bullish a backdrop for Altcoins as you can get.

This base was a big topic of interest in JC's recent discussion with Jim Bianco.

You can catch the full podcast here.

And here's this ruthless trend in absolute terms, slicing through our upside objectives like butter recently.

The million-dollar question that remains is simple... How long does it take Ethereum to clear our current objective near 3,500?

Just a few weeks ago, buyers pumped prices above the 161.8% extension, and it's looking like a similar upside resolution is about to take place at the current level.

By definition, the less price respects this potential level of supply, the more bullish the outlook for Ethereum and other Altcoins is in general. We think Ethereum is a pretty good barometer for the broader alt-coin space.

Is 5,700 next for $ETH/USD?

If it's above 3,500, we think all bets are on.

How about you? Let us know your thoughts!

Allstarcharts Team

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