Altcoins Underperform Bitcoin This Cycle, But Analyst Sees Room to Catch Up

During this bull cycle, the crypto market has been surfing off Bitcoin's crest and enjoying the bullish momentum. However, investors hope for a seismic explosion to impulse Altcoins to new highs.

Investors in the crypto market have been riding high on Bitcoin's wave during this bull cycle, hoping for a surge that will propel altcoins to new peaks.

However, recent data reveals that only a handful of altcoins have managed to hit a new all-time high (ATH) against Bitcoin since FTX's fall. According to a crypto analyst, this is due to several factors, including changing asset selection dynamics and the market's focus on specific sectors.

Only Eight Altcoins Hit New ATHs vs. Bitcoin This Cycle

On Friday, March 17, a crypto analyst named Miles Deutscher shared a curious observation about the crypto market. Since November 2022, only eight altcoins have broken their previous ATH against the flagship cryptocurrency.

To put this in perspective, here are the tokens that achieved this feat: Render (RNDR), Tellor (TRB), Injective (INJ), Astar (ASTR), SSV Network (SSV), SingularityNET (AGIX), True Wallet Token (TWT), and Binance Coin (BNB).

notably, RNDR was the last to accomplish this on March 11, and the list only includes altcoins that were launched before FTX's collapse.

Deutscher initially found the news shocking, but it made sense to him upon further analysis. He highlighted some takeaways based on the singularities of this run.

First, the analyst considers that asset selection dynamics have changed from previous cycles. Investors have been “punished” for being overexposed to certain sectors like L2 and gaming and “rewarded” for participating in others like Memecoins and AI.

In contrast, in the last cycle, “you could basically bet on anything and beat $BTC.” According to the analyst, the market will likely continue experiencing specific sector outperformance despite the retail liquidity injection.

He also explained that “crypto is an attention economy,” and money will flow where attention is. As a Result, even the projects with the best technology won't perform if there isn't an exciting reason to buy.

Deutscher's second takeaway highlights the market's current ATH dilution. As he points out, thousands of new products are being launched daily, and “low float/high FDV VC coins are launching in the billions.” These launches are outpacing the new liquidity, causing altcoins to struggle with performance.

More Room For Altcoins To Catch Up

The analyst's third point explains that the bull run has been led by Bitcoin and spot BTC exchange-traded funds (ETFs). Based on this, he considers it unsurprising that altcoins have “hardly pumped” so far.

Various crypto analysts and experts share this opinion. Alex Krüger previously stated that the cycle has been “almost entirely” driven by the Bitcoin ETFs' momentum.

Deutscher sees Altcoins' underperformance as a bullish signal since Bitcoin's dominance has been instrumental in previous cycles. To him, this performance allows “more room to play catch up” and could drive altcoins to unseen highs.

The analyst believes the market needs another catalyst for a true Altcoins season. Despite this, he highlights that many investors have had a record Q1 “even in mildly bullish conditions for most alts.”

Ultimately, Deutscher considers there is still room to make big profits this cycle “even without the face-melting altseason we all crave.”