Currently, the spotlight is on the Bitcoin price chart and the current state of the crypto and altcoin markets. Analyst Blockchain Backer said that while ETFs are crucial, but historically, the cryptocurrency market performs well during risk-on periods. While there are various narratives around crypto, such as sound money and block reward halvings, the reality is that the market often follows broader risk-on environments.
Observing the altcoin market, he said that it often peaks and rallies alongside traditional indices like the Russell 2000. This trend was clear yesterday when the Russell surged 3.9%, while the NASDAQ fell 2.24%. Smaller and mid-sized stocks outperformed major tech companies like Microsoft, Nvidia, Apple, Google, Amazon, Meta, and Tesla, indicating a broadening market participation.
This development is important according to the analyst. Historically, every major rally in the cryptocurrency market has coincided with similar behavior in the Russell 2000, whether in 2020-2021, 2016-2017, or 2012-2013. This broad market participation has been a precursor to significant upswings in the crypto market.
The recent action in the Russell 2000 is a positive sign, although it’s not a complete breakout yet. The market has been range-bound for months, and this initial movement is encouraging. The focus now is on whether this trend can continue and lead to broader market expansion.
He added that we did see some early signals from altcoins before Bitcoin started its expansion. For instance, XRP and Litecoin began to take off in 2017 before Bitcoin. Using reference points from 2017 and looking at Dogecoin’s history from 2013 to 2017, we see we’re at a critical moment where expansion typically begins.
Currently, there is broader market participation, which is essential for altcoins like XRP to show signs of life. This broader participation is a positive signal, especially since the Russell is rebounding to its previous highs while crypto prices remain low.
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