The altcoin market cap approaches its previous peak, indicating growing investor confidence.
Altcoins are showing remarkable resilience amidst recent Bitcoin volatility, as revealed in the latest findings from the ‘Bitfinex Alpha’ report. The Total3 index, excluding Bitcoin and Ethereum to gauge the broader crypto market, hit a fresh cycle peak at $788 billion on Mar. 14.
This milestone signifies a remarkable 74% surge from its bear market peak, indicating a flourishing altcoin investment landscape. It underscores a shift towards a more diverse crypto ecosystem, where altcoins are not only gaining momentum but also attracting significant capital inflows. Currently, the index is just 6.5% below its April 2022 high of $837.5 billion. Surpassing this mark could propel altcoins into a phase of ‘mania,’ marked by heightened investor excitement and substantial sector-wide gains.
In the ever-evolving world of cryptocurrencies, Ethereum’s Total Value Locked (TVL) continues to serve as a vital metric for assessing capital inflows into Ethereum Virtual Machine (EVM) compatible chains and projects. However, the emergence of other Layer-1 blockchains is reshaping Ethereum’s historical position as the primary bellwether for altcoins. Nevertheless, Ethereum’s influence in predicting movements in the altcoin market remains significant.
Despite facing new competition, Ethereum has encountered challenges in its performance relative to Bitcoin. The much-anticipated Dencun upgrade failed to catalyze a substantial price surge, unlike several other altcoins experiencing favorable trends. The ETH/BTC ratio is edging towards its bear market low, a level previously tested before the introduction of exchange-traded funds (ETFs) earlier this year.
Yet, amidst these developments, Ethereum-based altcoin projects are showcasing resilience and strength, as evidenced by robust on-chain metrics. Notably, a significant netflow of Ether from exchanges was recorded recently, with 154,000 Ether exiting centralized trading platforms. This shift suggests a potential short-term uptick in prices, possibly driven by traders reallocating their Ether to engage with ERC-20 protocols or Layer-2 platforms such as the Base mainnet, which has witnessed a remarkable doubling in TVL over the past fortnight.
The growing acceptance of major Layer-1 blockchains as the foundation for on-chain trading activities signals positive prospects for Ethereum and its counterparts. This trend not only enhances their utility and demand but also bolsters their resilience during periods of Bitcoin volatility.
Moreover, the weekly performance of large-cap altcoins underscores the strength of Layer-1 ecosystems like Tron, Near, Solana, Avalanche, Aptos, and Binance Chain, which are outperforming the broader market. Of particular note, Near has attracted significant investor interest ahead of the upcoming NVIDIA Transforming AI conference, where Illia Polosukhin, co-founder and CEO of Near Protocol, is scheduled to share insights, further enhancing Near’s profile and potential.