Altcoins Look Primed to Outperform Bitcoin

March 18, 2022

Cryptocurrencies: Daily Update


We have been specifically focusing on Bitcoin and macroeconomic trends in the crypto market for the past month or so, but now it looks like it may be time to start focusing on the altcoin market again.

2022 has seen a high degree of correlation between ETH and BTC price action, and we don’t see any reason why this relationship will diverge anytime soon.


Both coin’s have recently reclaimed their 50-day moving averages, another very refreshing sign of a potential bottom being in for cryptocurrencies. With nearly identical technical setups, what can we look at to help determine which will be the better investment moving forward?

The most important metric that we use to measure the relative performance of Altcoins v Bitcoin is the ETH/BTC trading pair. We call this a trading pair and not a simple ratio because it is often used for Pairs Trading when people believe that there will be relative outperformance in either ETH or BTC.

The reason we use the ETH/BTC pair to measure relative performance of Altcoins v. BTC is because ETH (18.4%) and BTC (42.4%) compose 60% of the total cryptocurrency market cap, so we’re getting a fairly accurate measure of the total market. Here’s what we’re seeing:


A clear wedge formed between the long-term positive trend and the shorter-term negative trend. Within 2 days of breaking out of this wedge, the pair is already looking to close at or above its 50-day moving average for the first time since January.

As we sit and watch Bitcoin continue to consolidate in a wide range between $33,000 and $45,500, Ethereum may look like a more interesting bet to outperform in the event of a market wide breakout.

It is possible that ETH can continue to outperform BTC on a relative basis even if the market takes a down turn, but it is not likely. In the event of BTC losing its $33,000 support, crypto investors are likely to dump their altcoins way before they sell their Bitcoin.

Other altcoin opportunities may be arising very soon, with individuals such as Solana (SOL) and Avalanche (AVAX) looking to attempt to claim a higher level of dominance in the larger crypto market.

Just yesterday, Coinbase announced that the Coinbase Wallet will now support SOL and Solana-based cryptocurrencies (of which there are many). Up until recently, the Coinbase Wallet only offered support for Ethereum-based cryptocurrencies, and the decision to adopt the Solana ecosystem is a clear indication of Coinbase attempting to offer a cheaper and more efficient Web3 network to their clients.

Avalanche is another altcoin that caught wind in just the past year and is still considered a relative newcomer to the larger DeFi space. Many believe that AVAX is just one wave of adoption away from directly competing with ETH for the title of the largest decentralized finance blockchain. The technical setup on AVAX looks pretty interesting too:


We can see a long-term wedge nearing completion on AVAX, but don’t wait too long because the coin has already reclaimed its 50-day moving average and looks ready to tackle its 200-day moving average next. The 10/50 Real Motion indicator is already back in a bullish phase, with the longer 50/200 RM looking prepared to reclaim a recovery phase.

All together, this setup on AVAX is something we’re keeping an eye on. Moreso, it looks like Altcoins are finally starting to wake back up!

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