Following the FED’s decision to cut interest rates Bitcoin (BTC) While the cryptocurrency recorded a modest rise, altcoins emerged as the prominent winners in the crypto market.
After the Fed announced a 50 basis point cut in the Federal Funds rate on Wednesday, altcoins surged, leaving Bitcoin and Ethereum (ETH) behind.
According to TradingView data, the Total3 Index, which tracks the market value of the 125 largest cryptocurrencies excluding Bitcoin and Ethereum, has gained 5.68% since the rate cut. In comparison, Bitcoin’s market value has increased by just 4.4%.
The trend is not surprising, according to Bob Wallden, head of trading at investment firm Abra. “Altcoins are higher beta than Bitcoin and ETH, so think of them as a leveraged trade on the broader crypto market, similar to how tech stocks outperform the S&P 500 (SPX) during periods of market growth,” Wallden said.
Altcoins, which represent all cryptocurrencies except Bitcoin and ETH, have likely benefited from the recent sell-off, providing momentum for a strong recovery. According to Bohan Jiang, head of OTC options trading at Abra, the asset class’ low liquidity levels are contributing to further volatility.
“Altcoins are on the fringes of the liquidity spectrum, so they tend to outperform when risk assets are doing well and liquidity is plentiful, which seems to be the case after the Federal Open Market Committee (FOMC) meeting,” Jiang said. He added that the weak liquidity and extended short positions in altcoins over the past few months likely triggered outsized gains similar to the “short squeeze” effect.
*This is not investment advice.
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Source: https://www.bitcoinsistemi.com/altcoinler-hareketlendi-bitcoin-ve-ethereuma-gore-daha-iyi-performans-gosterdiler-analistler-durumu-degerlendirdi/
