In 2020, where will the altcoins headed by ETH go?
Editor's Note: This article comes fromChain reference (ID: lianneican), Author: Internal Reference Jun, reprinted by Odaily with authorization.
Chain reference (ID: lianneican)
Chain reference (ID: lianneican)
, Author: Internal Reference Jun, reprinted by Odaily with authorization.
The fourth quarter of 2019 has been tough for Bitcoin and altcoins overall. On the one hand, BTC was still able to hold on to almost 90% of its gains to date by the end of the year. On the other hand, this year we have seen a very different story in the altcoin space. Major cryptocurrencies like ETH and XRP suffered double-digit losses, while altcoins like XTZ and LINK doubled and even tripled in price in some cases. What's behind the divergence in altcoin performance and how will 2020 develop?
As the price of BTC peaked, the altcoin began its six-month correction but failed to reclaim the 365-day moving average. The total cryptocurrency market capitalization has lost almost all of its annual gains and is close to where it was at the start of the year.
Source: TradingView
Total Crypto Market Cap - YTD Chart
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In 2019, despite the poor performance of the altcoin market as a whole, we have seen some smaller altcoin brands perform better than other major cryptocurrencies, even BTC. LINK and XTZ are some examples of this. Figure 2 highlights the huge gains we are seeing in LINK and XTZ. In contrast, ETH and XRP are already in the red.
Source: TradingView
ETH/XRP/XTZ/LINK/Crypto total market capitalization (excluding BTC) comparison - YTD
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Source: TradingView
We believe that the growing popularity of Bitcoin derivatives trading, investment preferences, and lack of institutional interest may be the root cause of the overall poor performance of altcoins this year.
Source: Skew
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Source: Skew
Source: Skew
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Source: Skew
BTC/Major Altcoins 30-Day Volatility and Daily Returns
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Source: Coinmetrics.io
Do Altcoins Still Have a Chance?
Source: DeFi Pulse
While altcoin brands such as ETH and XRP have been underperforming BTC and some smaller altcoins, the outlook for some large-cap altcoins such as Ethereum is not as bleak as prices would suggest. We note that due to the rise of decentralized finance (DeFi), the market narrative for ETH has quietly shifted from utility tokens to higher value transaction settlement applications.
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in conclusion:
Source: DeFi Pulse
