Alt season is sweeping across the cryptocurrency market, with small-cap coins riding high as bitcoin remains capped below $9,400.
Bitcoin drifts sideways as altcoins skyrocket
Bitcoin dominance, which measures the ratio between the market cap of Bitcoin and the rest of the cryptocurrency market, has dropped almost 3% over the past week as altcoins have picked up the slack. Stellar has clocked a 40% gain over seven days, and Tezos has surged 25%. Meanwhile, Cardano has continued its uptrend by adding 30% on growing hype over the upcoming Shelley upgrade.
Roaring altcoins reflect optimism in traditional markets. The Nasdaq hit a record high on Wednesday as tech stocks including Tesla and Amazon soared, and the traditional safe haven of gold surged to hit $1,818—just 6% short of the all-time high of September 2011.
This Week’s Highlights
- Ethereum Poised for Growth
- Bitcoin Hash Rate Hits All-time High
Ethereum Poised for Growth
While small cryptocurrencies have recently stolen the spotlight, the action could soon return to the largest altcoin of them all: ethereum.
Analysts including ex-Goldman Sachs investor Raoul Pal and Bitcoin Maximalist Tuur Demeester have laid out a strong bull case for the second largest cryptocurrency, which is currently behind boosted by the booming DeFi ecosystem and the upcoming switch to Proof-of-Stake.
Bitcoin Hash Rate Hits All-time High
Bitcoin’s hashrate, which measures the difficulty of mining new blocks, reached a new peak last week. This metric reflects the resources committed to the network by miners, and is widely thought to indicate network health.
Historically, rising hash rates have foreshadowed increases in the price of bitcoin. Both derivatives trader Cantering Clark and Capriole digital asset manager Charles Edwards have pointed this out, suggesting the recent spike could signal an upcoming rally.
The Week Ahead
With alt season in full swing and network fundamentals improving on both bitcoin and ethereum, the week ahead looks rosy for crypto markets.
The first hurdle for bitcoin bulls lies at $9,400, a level which has capped gains for the last few weeks. A break beyond here could lead to a larger rally, potentially creating an abrupt end to positive altcoin price action as traders scramble to get back into bitcoin.
On the negative side, bullish momentum in bitcoin could face headwinds from broader markets as banks deliver earnings reports for what could be the worst second quarter since the Great Financial Crisis. If recent price action is any indication however, stocks are likely to look past the negativity towards a brighter future.