ETH/BTC has bottomed, ALT/ETH will decline, ALT/BTC may rise late August.

ETH/BTC has bottomed, ALT/ETH will decline, ALT/BTC may rise late August.

The crypto market is experiencing a significant divergence this week, with large-cap altcoins like Ethereum, XRP, and Chainlink surging while Bitcoin remains relatively flat. This dynamic has raised concerns among traders about potential market froth and a looming correction.

Altcoins' Surge and Bitcoin's Stagnation

Large-cap altcoins have shown strong momentum, with Ethereum approaching the $4,000 mark and XRP and Chainlink also posting impressive gains [1]. This performance has been driven by institutional money flowing into Ethereum and positive regulatory news, such as a new executive order allowing crypto in 401k retirement plans [1]. However, the lack of Bitcoin's leading role in this rally is a classic warning signal, indicating potential market froth [1].

ETH/BTC Bottoming and ALT/ETH Decline

According to Brian and Maksim's analysis, ETH/BTC has bottomed, suggesting that the pair may be entering a period of consolidation or a potential rise in Ethereum's value against Bitcoin [1]. This development is significant for investors, as it could indicate that Ethereum's recent rally is sustainable and that the asset may continue to outperform Bitcoin in the short term.

However, Maksim shared a custom metric that suggests ALT/ETH may decline in late August. This metric combines stablecoin deposits into the "safe" yield protocols of MakerDAO and Spark, indicating a shift in sentiment towards riskier assets [1]. If this trend continues, it could lead to a decline in the value of altcoins relative to Ethereum.

ALT/BTC May Rise Late August

While ALT/ETH may decline, ALT/BTC could see a late-August rise. This trend is supported by the current market dynamics, where altcoins are surging while Bitcoin remains stagnant. This divergence suggests that capital is flowing into riskier assets, a sign of market froth that can precede a correction [1]. However, if Bitcoin's dominance decreases and the overall market cap rises, it could indicate a late-stage rally, leading to a potential rise in ALT/BTC.

Conclusion

The crypto market is currently experiencing a significant divergence between altcoins and Bitcoin. While ETH/BTC has bottomed and ALT/ETH may decline, ALT/BTC could see a late-August rise. Traders should monitor these developments closely and use tools like MVRV analysis and social dominance to identify potential market tops and bottoms.

References

[1] Watch Video on Youtube Crypto Market Analysis August 8th: Altcoins Surge While Bitcoin Stalls: A Warning Sign? Executive Summary. [URL](https://app.santiment.net/insights/read/this-week-in-crypto-full-written-summary-w2-august-8845)