Since Sunday, Bitcoin has been on an upward rally that has reinvigorated the market once more. The digital asset went from trading below $20,000 to reclaiming its spot above $24,000 once more, all in the span of one day. Naturally, other assets in the space have followed BTC’s lead and returned to the green territory but Bitcoin continues to forge ahead of the large caps in terms of gains.
Bitcoin Stays Ahead Of The Pack
The vast majority of the crypto market is back in the green once more, but Bitcoin has managed to stay ahead of the pack. Usually, cryptocurrencies in the market, especially the large caps, tend to closely track the recovery pattern of BTC. But this time around, they have not been able to maintain gains on the same level as the leading cryptocurrency.
Bitcoin’s rally saw it cross $24,000 and in the last day, the digital asset’s gains have risen above 12%. However, while the large cap cryptocurrencies have also followed the recovery, they have registered fewer gains compared to the market leader.
An example of this is Ethereum, which is the only one out of the large caps to maintain a higher than 50% performance compared to BTC. It the last day, the second-largest cryptocurrency by market cap is up 6.82% compared to BTC’s 12.21%.
BTC stays ahead of large caps | Source: Coinmarketcap
Going further down the list, BNB is up only 3.52% in the 24-hour period. Similarly, Cardano (ADA) is seeing 3.32% gains, while Polygon (MATIC) and Dogecoin (DOGE) are up 5.25% and 5.16%, respectively. XRP is the worst performer of the pack with only 2.43% gains.
Altcoin Season Could Change The Narrative
Bitcoin historically starts moving before the rest of the market but eventually, the altcoins do catch up. A period when altcoins in the market are rallying regardless of whether BTC is moving or not is known as ‘altcoin season’ and it is a period where altcoins begin the race to catch up with Bitcoin’s gains.
BTC clears $25,000 resistance | Source: BTCUSD on TradingView.com
This is what happened in mid-2021 when altcoins began to rally exponentially right after BTC established support above the $40,000 gains. This gave altcoins time to catch up and lower market caps allowed for higher multiples when it came to gains.
Now, this could follow the same trend this time around, meaning that the gap between Bitcoin and the large cap could be merely temporary. If this is the case, then altcoins could easily stage a catch-up rally in the next week, which will see double-digit gains among the large caps, and that liquidity will trickle down all the way to the small caps. Such a top-down rally can signal the start of the next bull market.
At the time of writing, Bitcoin has cleared the $25,000 level after being rejected in the early hours of Tuesday. $25,000 currently stands as the most important level for the digital asset for it to secure its short to mid-term bull rally and a comfortable move above this means that $30,000 becomes the next significant level.