Crypto analyst Nicholas Merten says that altcoins could be in for a leg upward as Bitcoin continues to trade above $60,000.
In a new analysis video, Merten says that many traders were expecting BTC to steal the show the moment it broke all-time highs following the launch of the ProShares exchange-traded fund (ETF).
Instead, the analyst says the altcoin market has made a surprise surge, which he believes could be a significant sign of strength.
“I still think that we’re going to see altcoins in the same exact position. Many of them like Etheruem already pressing up to those previous all-time highs following suit with Bitocin and already starting to outpace Bitcoin during its big week. This might be a little bit of a buy the rumor sell the news event where a lot of the liquidity shift doesn’t just go to Bitcoin, but especially goes to altcoins.”
Taking a look at altcoin dominance, which compares the market share of altcoins to that of Bitcoin, Merten says that the metric bounced of a crucial support line near 52%.
“At the peak moment of fear where everyone’s looking to rotate, when people are thinking ‘Oh my god we’re going to break the support line,’ or ‘It’s just too late for altcoins’, lo and behold, we bounce up not only exactly around this general support range around 52.5%, but all the way up to 54.15%.”
The analyst posits that the decentralized finance (DeFi) sector of the crypto markets could deliver promising gains in the next few months.
“So the idea here is that we could start to come up and set new highs in dominance for DeFi. DeFi is one of the most fundamental sectors in the crypto space. It’s got real adoption, real traction, real excitement behind it…
I think that there’s a very good chance here that in the coming months, as we go into Q1, we could start to see DeFi dominance start to grow and it might even happen quicker in this case.”
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Featured Image: Shutterstock/Tithi Luadthong