Currently, attention to crypto assets is not just limited to Bitcoin alone; alternative coins or altcoins, such as Binance Coin and Ethereum, are gaining popularity.
We can see in the movement of the crypto market, which is being driven by investors who appear to be regaining trust in altcoins as alternative digital currencies. As a result, based on the crypto market cap, BTC seems to be declining.
Altcoins can also outperform Bitcoin
The metric has been trending sideways since May 2022 after having an upward push, as shown in the image below. Furthermore, it is 2021, when Ethereum and other altcoins have just reached all-time highs, and Bitcoin is expected to crash.
If the current trend continues, Bitcoin may fall behind altcoins. The metric retests the lows yearly, falling from 43% to 30%. It can open up possibilities for greater altcoins.
According to an Arcane Research analysis, the cryptocurrency index showed a good image in August. The research results show that the significant, medium, and small-cap indices gained 9%, 7%, and 5%, respectively. In contrast, BTC increased by 2%.
Next, the most significant upside is attributed to an increase in risk exposure, and the stablecoin following a similar trajectory dominates Bitcoin. Arcane Research findings confirm:
With bitcoin underperforming relative to altcoins, bitcoin dominance has fallen from 47% in mid-June to 40.5%. As market sentiment improved, traders became more interested in gaining exposure to altcoins than bitcoin.
Altcoins may continue to dominate the crypto market in the short future as BTC prices remain sideways. Thus, investors wanting more significant returns may consider switching to crypto market capitalization if they have more considerable risk tolerance.
Reasons for a Short-Term Drop in Cryptocurrency Markets
Although it is a positive month for most crypto markets, some cryptos are experiencing low bearish action. Macroeconomic factors influence this.
The US Federal Reserve (Fed) will release the July Consumer Price Index report on Wednesday (10/08/22). (CPI). This indicator is used to track inflation in US dollars, which is rising and at a 40-year high.
The fed raised interest rates and changed its monetary policy to slow inflation. If the July CPI printing is booming, financial institutions may take a more cautious approach.
It might lead to increased bullish momentum in risk assets such as Bitcoin and crypto markets.
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