The Case For A Crypto Asset Rally
Fundstrat’s prominent head of research, Tom Lee, recently took to Twitter to remark that one of the “pre-conditions” for historical rallies is coming to life in the current cycle. This precursor, for those unaware, is a drop in the correlation between the crypto asset class at large and () itself.
Per Lee’s chart (seen above), a strong drop in the rolling 90-day correlation between the two subsets has preceded three altseasons — Mar 2016, early-2017, and late-2017/early-2018. An altseason, as defined by Fundstrat, is when a large percentage of in the “liquid universe” rally by over 200% in a few months’ time.
With preliminary indicators predicting a further collapse in the correlation between digital assets and , an altseason might already be well underway. If you take a brief gander at CoinMarketCap or other analytics providers, this would seemingly be the case.
Coin (BNB) its all-time high, in a brutal bear market no less, as the launch of the exchange’s in-house chain and decentralized exchange have been a boon for its price. , , and Basic Attention are among other prominent that have also seen jaw-dropping gains in the past 90 days, as they push higher as a result of fundamental and technical factors. But, this uptick might just be the tip of the iceberg.
2/ past alt-seasons averaged 1,100% gains
Will the next alt-season be as strong as the past? Given there are probably only ~50mm active wallets (vs 5 billion Visa/MasterCard accts), we think crypto still early in the curve. So it should be similar
— Thomas Lee (@fundstrat)
As Lee explains, historical altseasons averaged gains of 1,100%. He adds that Fundstrat expects for the next rally in to “deliver returns similar to the 2017/2018 cycles.” Fundstrat isn’t the only entity claiming that crypto assets other than could outperform in the coming months.
Per from World News, Twitter commentator Galaxy explained that with ’s market dominance rally being the weakest so far, he wouldn’t be surprised to see ’s share of the cumulative value of fall under 30%.
Analyst Begs To Differ, Keeps Portfolio bitcoin-Heavy
Another prominent analyst, however, claims that might not be ready to push higher against just yet. In a recent tweet, The Crypto Dog, who sports over 100,000 followers on Twitter, claimed that as fell faster and further than (-2.5% compared to -1%) in Sunday’s drawdown, he is now less interested in other . He explains that he will now be skewing his portfolio heavier to , as he expects for the market leader to begin to outperform in this time in this indecisive time.
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Published at Sun, 21 Apr 2019 22:17:03 +0000
