Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesCopyBotsEarn
Why Are Altcoins Underperforming Bitcoin? Analytics Company Evaluates Dominance

Why Are Altcoins Underperforming Bitcoin? Analytics Company Evaluates Dominance

BitcoinsistemiBitcoinsistemi2024/12/11 06:55
By:Mete Demiralp

The world's largest cryptocurrency, Bitcoin, continues to outperform altcoins. The analytics firm has assessed the situation.

Cryptocurrency analytics firm Alphractal has expressed concern about the current state of the altcoin market, noting a period of underperformance in the short to medium term. According to the firm, Bitcoin’s (BTC) dominance continues to rise despite the decline in its price, which suggests that funds are shifting from altcoins to BTC or stablecoins.

Alphractal’s analysis highlights that ongoing correction cycles are typical during Bitcoin bull runs. Historically, altcoins often lose a significant portion or even all of their recent gains during such periods. While Bitcoin maintains higher price levels, many altcoins struggle to maintain their previous highs, leaving the market more vulnerable.

Highlighted by Alphractal, December has traditionally been a month of market indecision and volatility. The firm pointed to December 2020, when XRP lost all of its gains in November, only to recover months later in February 2021. These price movements are often attributed to market makers creating downward pressure to liquidate positions, triggering stop-loss orders, and instilling fear, potentially setting the stage for a new rally.

Related News JUST IN: Coinbase's Listings News Keep Coming - They Listed Another Altcoin as "Experimental"

Given the short-lived nature of altcoin bull and bear cycles, effective risk management is important, Alphractal said. “Diversifying across BTC, altcoins, and stablecoins is crucial to mitigate risk and capitalize on opportunities,” the firm said, urging traders and investors to remain cautious and vigilant during this period of market uncertainty.

*This is not investment advice.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!

You may also like

El Salvador Announces New Bitcoin Step Despite IMF Warning

Bitcoin country El Salvador has taken a new step for BTC despite the stern warning and new agreement from the IMF.

Bitcoinsistemi2024/12/22 21:55

Tether (USDT) Shares Its Profit Generated in 2024

Tether (USDT), the world's largest stablecoin issuer, shared the amount of profit it made in 2024.

Bitcoinsistemi2024/12/22 21:44

New Proposal from Bitcoin Hater Peter Schiff: “Let’s Create a New Altcoin Reserves Instead of BTC Reserves”

Peter Schiff, known for his intense criticism of cryptocurrencies, opposed the strategic Bitcoin reserve proposal.

Bitcoinsistemi2024/12/22 21:44