Market commentary
The Bitcoin price (BTC) recorded another green weekly close. This makes eight green weekly candles in a row. The last time such a pattern was seen was in spring 2017. The mother of all cryptocurrencies is in a clearly parabolic phase. One of the drivers of the rise remains the expectation of a spot-based Bitcoin ETF. Analysts expect approval on January 10, 2024.
The second-largest cryptocurrency by market capitalization, Ether (ETH), is gradually keeping pace with the price of Bitcoin. Since the beginning of the year, the ratio between the two assets (ETH/BTC) has fallen by 26%. The price is now leveling off somewhat in the historical support zone. Following the approval of the Bitcoin ETF in mid-January, the narrative could shift in favor of Ether.
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Memecoins like PEPE are catching up
The longer the parabolic phase for Bitcoin lasts, the sooner profits from the highly capitalized cryptocurrencies ("large caps") will flow into the riskier tokens. As an established sub-sector, "memecoins" - cryptocurrencies that were created as a "joke" purely for speculation - are benefiting from this. Dogecoin (DOGE) has been the poster child of memecoins for years.
This spring, however, the dog currency gained a competitor, also from the animal kingdom: PEPE. The daily price increases in the double-digit percentage range for these memecoins reflect the rapidly increasing risk appetite of many market participants. However, speculators should be wary of getting too close to the sun.
Bitcoin profit rotation: is an alt season on the horizon?
A certain rotation from Bitcoin into alternative tokens (altcoins) becomes apparent when looking at the top 20 cryptocurrencies by market capitalization. The market's favorites continue to record stronger price increases than Bitcoin. Over the past week, Solana (SOL) gained +16.41%, Shiba Inu (SHIB) +14.70%, Dogecoin (DOGE) +13.97% and Chainlink (LINK) +13.58%.
In all time frames (7 days, 30 days, year-to-date), the top 20 are in the green. The only outlier is BNB, the token of the largest crypto exchange Binance. Regulatory authorities have scrutinized the trading platform particularly closely this year. Two weeks ago, Binance agreed to pay a fine of USD 4.3 billion.
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