The price of Bitcoin (BTC) has been rallying strongly while Ethereum (ETH) and other large-cap alternative cryptocurrencies (altcoins) have slumped. In previous bull cycles, ETH front ran BTC, not the other way around.
The current market dynamics are uncanny because Bitcoin has been solely increasing in price, while the cryptocurrency market stagnates. In fact, major altcoins, including Ethereum, have been dropping in value against both BTC and the U.S. dollar in the past nine days.
Three factors are likely causing the underperformance of Ethereum and altcoins against Bitcoin. First, profits are seemingly cycling back into BTC. Second, the technical momentum of BTC remains strong. Third, BTC’s volume share is rising against other cryptocurrencies.
Three factors are likely causing the underperformance of Ethereum and altcoins against Bitcoin. First, profits are seemingly cycling back into BTC. Second, the technical momentum of BTC remains strong. Third, BTC’s volume share is rising against other cryptocurrencies.
The combination of favorable technical, fundamental, and macro factors appear to be pushing Bitcoin upwards in a short period. Whether the trend could continue on without a pullback remains the uncertainty.
Some traders and investors believe the momentum of BTC is simply too strong after breaching a key technical resistance level at $12,000. Others believe that because the last local top was achieved at $12,500, correction is due.
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