According to Nicholas Merten, a popular cryptocurrency analyst and trader, altcoins could be preparing for a rally, while Bitcoin continues to trade above $60,000.
In a recent video, the analyst opined that many traders assumed Bitcoin to dominate the market as soon as it broke all-time highs after the launch of the ProShares exchange-traded fund or ETF.
However, according to Merten, altcoins have jumped surprisingly, which he believes flashes signs of strength for the altcoin market.
“I still think that we’re going to see altcoins in the same exact position. Many of them like Etheruem already pressing up to those previous all-time highs following suit with Bitcoin and already starting to outpace Bitcoin during its big week. This might be a little bit of a buy the rumor sell the news event where a lot of the liquidity shift doesn’t just go to Bitcoin, but especially goes to altcoins.”
Regarding altcoin dominance, which measures altcoin market cap relative to that of Bitcoin, the trader points out tha the altcoin dominance bounced of a crucial support level approximately 52%.
“At the peak moment of fear where everyone’s looking to rotate, when people are thinking ‘Oh my god we’re going to break the support line,’ or ‘It’s just too late for altcoins’, lo and behold, we bounce up not only exactly around this general support range around 52.5%, but all the way up to 54.15%.”
According to Merten the decentralized finance (DeFi) sector might be the one to deliver most promising gains in the coming months.
“So the idea here is that we could start to come up and set new highs in dominance for DeFi. DeFi is one of the most fundamental sectors in the crypto space. It’s got real adoption, real traction, real excitement behind it…
I think that there’s a very good chance here that in the coming months, as we go into Q1, we could start to see DeFi dominance start to grow and it might even happen quicker in this case
