Bitcoin prices have settled to $7850, according to BitMEX, forming what some describe as a “bart” pattern over the course of the last week. Traders appear to be engaging in price discovery, and volatility is continuing the climb.
As shown below, BTC started its bull rally April 1st 2019:
Bitcoin’s value increased by approximately 90% in that time frame and its share of the market increased by 7 percentage points. Its dominance topped out last week at 60%, but alts have been outperforming BTC since then.
Some coins that have been outperforming BTC since April 1st despite the bull rally. By identifying these coins, we can create a hypothesis that some of them could regress towards the mean and underperform BTC after these aberrant overvaluations.
After all, our similar analysis last week on 5 altcoins primed to outperform BTC was wildly successful, and the 5 coins we identified using a similar strategy outperformed BTC by an average of 15% in the next 24 hours.
On to the analysis….
We took the top 300-coins on April 1st and compared them to the top-200 coins on May 20th, to identify those that have been steadily outperforming BTC.
Five coins stood out as outliers:
- Bitcoin Cash (BCH): BCH has outperformed BTC by 25% since April 1st, but at the same time BSV has underperformed BTC by 50%. It’s likely that this outlier is more to do with BCH out-competing BSV and taking its market share, as opposed to improving against BTC. The gap between the price of BCH and BSV could continue to widen, and in that case, BCH may continue gaining ground.
- Chainlink (LINK): LINK announced that their mainnet will launch on May 30th, so it’s likely this overvaluation is ”linked” to mainnet excitement. Expect further analysis from Crypto Briefing on the best strategies to trade around LINK’s mainnet. LINK actually underperformed BTC by 2% since April 1st, but it has also been the 20th best performing coin in the data set since that period.
- SOLVE: SOLVE has been the best performing token in this period, outperforming BTC by an outlandish 144%. Much of that is to do with some highly publicized strategic partnerships (notably with Lyft) and the fact that ICO participants needed to hold their tokens for 1 year before being unlocked. Most tokens have now been released, but there will be a rather large airdrop on July 1st that could dilute the outstanding supply.
- Arcblock (ABT): ABT has outperformed BTC by 67% since April 1st, which was accomplished by “announcing life changing announcements to come in the future.”
- CLAMS: CLAMS has outperformed BCT by 45% since April 1st, and its trading volume is abysmal – it has fallen off of a cliff since 2017, and the only exchanges it is listed on are Poloniex and YoBit. Poloniex has been delisting coins left, right and center since being acquired by Circle, so it’s easy to imagine a world where CLAMS could face a similar fate. With volume levels as low as 8 BTC, per day even novice-level traders can influence the price by buying or selling.
Based on these data, we expect to see BCH, LINK, SOLVE, ABT and CLAMS to lose some of their value, at least when measured in satoshis. But, as always, past experience does not guarantee future results; some of these tokens could continue to outperform Bitcoin in the long-term, or even replace it.
If the fundamentals and sentiment surrounding these coins have genuinely improved, we could expect them to remain ahead of BTC. But if previous analysis is any indication, we wouldn’t be surprised to see bitcoin catching back up.
Note that this analysis is not based on these coins’ fundamental strengths or qualities, merely on relative value over time. Not financial advice. As always, please read the disclaimer on this page.