Bitcoin dominance declines


Joe McCann of cryptocurrency investment fund Asymmetry said there is significant evidence that the market structure has shifted from bearish to bullish.

Asymm is an active investor in the DeFi market, and their recent market memo has raised eyebrows, especially in the current environment.

After massive price increases over the past year, heavyweight assets like ETH and Bitcoin appear to be in a relatively unchanged state (at least price-wise), while many others like SOL, LINK, and even more obscure memecoins like BONK have. In trouble. has recently gained significant attention. Many cryptocurrency enthusiasts have expressed their frustration at being marginalized. They feel comfortable holding ETH and stablecoins, but have missed out on the huge gains of the token which has seen its price increase by more than 50% in the past few weeks.

The chart below of the DeFi Index’s performance relative to ETH and Bitcoin shows the changes in the cryptocurrency market, with the DeFi Index’s 30-day returns outperforming ETH’s performance on November 5. The index includes names such as COMP, Aave and Yearn.

McCann noted that Solana’s bullish view has been critical to this rally and has been for some time.

He emphasized that inflows into fund products are increasing compared to other assets, on-chain transaction activity is increasing, and staking through Jito is more popular.

“The total value of on-chain transactions is the highest all year. It’s not just trading activity happening on Solana. NFT activity is also booming.”

Ethereum Currently performing slightly better than SecondItcoin

According to data from CoinShares, ETH has slightly improved its performance over the past week compared to BTC.

“ETH has outperformed Bitcoin by approximately 4.55% over the past week,” said CoinShares research associate Luke Nolan.

However, Nolan added that a closer look at the ETH/BTC trading pair reveals that ETH’s recent rise is more technical in nature rather than a sign of increased interest in Ethereum itself.

Nolan shared ETH/BTC ratio data with The Block, showing that ETH recently fell to technical lows for BTC, last seen in June 2022. However, data shows that ETH has rebounded above that low over the past few days.


ratio Ethereum/Bitcoin | Source: Coin stocks

zkLink co-founder Vince Yang offered several possible reasons for ETH’s recent bullish move.

“The upcoming Cancun upgrade has generated increased interest and demand. We believe the drivers for ETH are technology and ecosystem developments. Demand and price for ETH will continue to increase and at some point may topple BTC as There’s no real business use case other than storing and transacting value.”

ratio Bitcoin dominance declines

Bitcoin’s dominance peaked at around 54.4% last week and currently stands at 51.8%, according to CoinShares data. Nolan said:

“This, coupled with the fact that Bitcoin is still trading at yearly highs of $34,700 to $35,000, suggests that altcoins perform well when Bitcoin stalls.”

YouHodler Market Manager Ruslan Lienkha also observed signs that the altcoin market has attracted some capital inflows, fueling Bitcoin’s recent surge. Lenka added:

“There is some optimism in the market and the upward trend may continue. Unfortunately, we cannot yet call this growth sustainable because macroeconomics will affect the market in the long term.”

Lienkha emphasized that despite ETH’s recent growth, its reaction over the past few weeks has been quite limited compared to the growth in other cryptocurrency markets. Considering ETH’s central position in the entire cryptocurrency ecosystem, he expressed general concerns about the ETH market reaction.

“Despite the market’s correlation, ETH appears weak, and given ETH’s important role as the second largest cryptocurrency in the crypto world, we expect ETH prices to go higher, at least to $2,000.”

YouHodler Chief Market Officer advised investors to pay attention to how the Federal Reserve will guide its monetary policy at the next FOMC meeting.

“Economic data in the U.S. and the next Fed meeting will influence and adjust sentiment in all markets. So the current situation is a bit different from previous crypto bull runs because the crypto market was more insulated from TradFi before.”

The next FOMC meeting will be held on December 12-13. The Federal Reserve stabilized interest rates at 5.25%-5.5% at the FOMC meetings in November 2023 and September 2023, which brought some breathing space to the underfunded stock market.

At the same time, stablecoin trading volume hit a new high since March last month, and spot trading volume is also rising.

McCann explained:

“Speculators are entering the market and choosing riskier trades.”

He noted that the trend started with Solana but has expanded to Layer 2 assets and other high-return assets.

A large portion of these capital flows come from Asia, he said. Historically, Asian investors have favored Bitcoin and Ethereum, but as these cryptocurrencies become more popular, they are now looking for assets with greater upside potential.

However, the liquidity situation of cryptocurrencies must be considered. Looking at this rally more cautiously, there is reason to believe that we are seeing a price increase in a low volume environment, and even a small spark could trigger a price increase.

“Liquidity is only 1/10 of what it was before, so you often see exaggerated moves,” one portfolio manager noted in a Telegram DM. “Historically, when compelling new use cases emerge to attract people back We’ve seen a sustained bull market in this space since 2017. I see the value in blockchain and it’s definitely leading to the idea of ​​buying more products.”

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According to AZCoin News


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