Based on price data from coinmarketcap.com nearly all top altcoins and Bitcoin are going through a downward spell. But there are outliers, altcoins like XRP, THETA, FIL, CRO, MIOTA. They are outliers because their weekly ROI is double-digit, positive, and safe from the current bearish outage.
Swimming against the tide, and having these altcoins in a portfolio, can mean the difference between net unrealized profit and net unrealized loss in the current scenario. Though historically, outliers emerge in every rally, they emerge in every downward trend as well.
Currently, they include top altcoins, DeFi, NFTs, and other tokens with narratives centered on product updates, launches, and shortage of supply/ liquidity crunch. Among top altcoins, ETH with a 0.86 correlation to BTC is about 48 days from its local peak on Feb 2021.
It is expected that the consolidation and the price rise will come, however, the current drop in trade volume (20% in 24 hours) and the dropping demand from institutional and retail traders may have slowed down the uptrend in ETH.
It may take over a month’s recovery for ETH, based on its historic performance. This break from leading the alt rally is instrumental in increasing ROI of the outliers.
The key to getting maximum returns on trades for retail traders is to identify the right mix of outliers, large-cap alts, and Bitcoin, as these coins take turns rallying, every few times in the Bitcoin bull run. The bull run isn’t over for Bitcoin, and neither is it for ETH or the outliers.
Changes in HODLing pattern and transition like the one taking place on the ETH network are fueling this shift in leading the alt rally.
Based on the above chart from Santiment, Ethereum’s top 100 non-exchange addresses now collectively hold the highest volume of ETH, historically, since July of 2016. At the same time, the top 100 exchange addresses are making a move in the opposite direction, selling or transferring ETH to other wallets, since they hold the lowest volume of ETH than they did in over two years.
These changes in HODLing of ETH and whale activity are critical to other alts like THETA since they are being discovered more rapidly on spot exchanges now. Traders who are pulling out of BTC and ETH may invest in the altcoins whose trade volume is up and liquidity is driving the price.
One such outlier is THETA and it became the retail traders’ muse only after crossing $10 and that happened this week. The tokens offering double-digit ROI in the past week, are offering negative 24-hour returns at the moment, but the point being examined here is the consistency of ROI and the opportunity for booking unrealized profits.
This may be the alt rally comeback that most traders have waited for, since Bitcoin became rangebound for yet another time in the current market cycle.