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Altcoins like Bitcoin Cash and Ethereum are ripping today as buying seems to widen in the cryptocurrency space.
Ethereum (ETHUSD) is up more than 5 percent in the last 24 hours, while Bitcoin Cash (BCHUSD) has advanced 11 percent. ETHUSD is the world’s second-biggest cryptocurrency, accounting for almost 8 percent of the market. BCHUSD ranks No. 4 at less than 3 percent.
So-called altcoins, or alternatives to the original Bitcoin (BTCUSD), have outperformed since mid-January. That marks a change in sentiment from the previous two years, when they lagged BTCUSD by a wide margin.
It could be positive for cryptocurrencies because altcoins rose more than BTCUSD during the last bull market of 2016 and 2017. It’s similar to breadth in the stock market, when investors widen their buying into smaller companies as prices advance.
No single news event seems to explain the strength in altcoins, although attention seems to be returning to cryptos. Earlier this week, for instance, CNBC reported that BTCUSD had its best January in seven years.
Google Trends also shows interest in the term “halving” has doubled since late November. Halving is technical change in BTCUSD that will slow the supply of new tokens. Expected on May 12, this process has previously had a positive impact on prices.
Crypto watchers like Tom Lee and Mati Greenspan have also made bullish predictions in the last week. Lee said yesterday on Yahoo Finance that BTCUSD might triple after breaking above its 200-day moving average. On January 30, Greenspan said that $6 billion of new capital was poised to enter the market.
In conclusion, cryptocurrencies continue to recover from their big drops in 2018 and 2019. Strength in altcoins today suggests the process may be widening.
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