Cryptocurrency investors have been pulling away from cryptocurrencies via a downtrend in the market due to the high volatility that rocked these digital assets. As a result, the decline in these altcoins was more brutal than the decline recorded in Bitcoin. However, as the tide begins to turn and the market looks towards more upside, these altcoins have taken their place at the top of the recovery streak, sending investors rushing in.
Altcoins provide more gains
Over time, altcoins have been shown to record the widest movements during any type of market. So, just as they have a high tendency to make big losses, they also have the same trait when it comes time to take profits. This is the case this time around, as investors have called for altcoins to cash in on the gains.
Barely two weeks into August, cryptocurrencies quickly took the lead when it came to gains. The small cap index, which suffered greatly during the downtrend, is finally passing the sun. It saw the biggest gains in the past 10 days, exiting 9% for this time period.
The Average Capital Index follows the Small Business Index in this respect. Although it didn’t see as many gains as its smaller counterpart, it did see a 7% gain for the time period. It also extended to the Large Cap Index, which saw a gain of 5% in the same time period.
Small Cap Index sees largest gains | Source: Arcane Research
These gains show that investors are starting to regain their confidence in the market once again. Exposure to the altcoin is rapidly increasing, driving up prices across these indicators.
Bitcoin follows a positive trend
Altcoins weren’t the only ones experiencing positive growth in the first week of August. Positive market sentiment was widespread and affected various digital assets, albeit to varying degrees.
Bitcoin has seen smaller gains compared to its altcoin competitors, but it has seen gains nonetheless. It came as an index with the lowest returns to date, at just 2%. Despite this growth, digital assets still underperform compared to altcoins. This is evidenced by the market dominance of digital assets, which has fallen by about 7% in just the past two months.
Market cap rests above $1.1 trillion | Source: Crypto Total Market Cap on TradingView.com
What this shows is that investors are now moving away from the safe haven that bitcoin offered during the market crash and are now focusing on altcoins. This has also spread to stablecoins which have also seen their domination of the market by altcoins.
In the past week alone, ETH’s dominance grew by 0.89%, while Bitcoin and the leading stablecoins lost between 0.12% to 0.96%. This new risk appetite can be rewarded in the first place, or investors may find themselves burned out if the market wants to pull back.
Featured image from Binance, charts from Arcane Research and TradingView.com
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