Bitcoin [BTC] to Altcoins (Ethereum, Litecoin, etc.) Ratio Reaching All-Time High
The figure below measures the Altcoin/Bitcoin Capitalization Ratio. To put in perspective, if the price (market capitalization) of altcoins increases over Bitcoin, the ratio will increase.
As the price of Bitcoin is in an uptrend and altcoins are strongly correlated to Bitcoin, we can see a rise in the ratio.
However, expert on-chain analyst Willy Woo (who introduced the ratio), notes that altcoins are dying a slow death according to the altcoin capitalization to bitcoin price ratio. The trendline that is shown the figure forms critical support levels for the altcoins.
Willy Woo noted,
If this level fails, I’d expect roughly a 60% drop relative to Bitcoin’s cap before we some the next area of support.
Let’s look at the ratios of some of the popular currencies.
For long, Analysts have viewed the gold to silver price ratio for draw out conclusions for the commodities market. Let us consider cryptocurrency markets as a separate unit similar to the commodities.
Obviously, metals have more utility than cryptocurrencies, and they are far different from each other (as economists like Nouriel Roubini would argue). Nevertheless, Bitcoin as the leading crypto certainly forms the gold standard for the market.
Hence, similar to the Bitcoin to Silver to ratio, we’ll take a look at the ratios of some of the other popular cryptocurrencies.
Bitcoin to Ethereum and XRP
Ethereum [ETH] is the second-largest cryptocurrency w.r.t. market capitalization. Moreover, the platform hosts a couple of popular cryptocurrency projects like stablecoins (USDT, USDC, TUSD) exchange tokens (BNB, LEO, HT, OKB) and other utility and NFTs (Non-Fungible Tokens).
There is a slight similarity between the price ratios of Ethereum and XRP with Bitcoin. While Ethereum faces project risk with the upcoming shift to PoS (Proof of Stake), XRP is facing competition from the banks, stablecoins and a plethora of other platforms.
Normally, a break to the upside would be considered as a positive signal. However, this is the inverse ratio, hence ETH/BTC price or XRP/BTC is likely to drop. Still, this is no place to do technical analysis.
Bitcoin to Litecoin
Litecoin [LTC] halving this year has had a considerable effect on the price ratio of the crypto. Nevertheless, BTC/LTC is forming a bullish descending channel pattern. Again, this not the place to do TA. Just an overview.
People hoping for an alt-season have to be aware that another selling run in the market could the final blow.