While Bitcoin ($BTC) is edging closer to its all-time high of $100,000, altcoins are stealing the spotlight. Many are outperforming Bitcoin for the first time since its last major rally in 2021.
Back then, the cryptocurrency market experienced massive growth, only to crash later, leaving investors wary.
Bloomberg reports that this cautious sentiment persists, especially as altcoins tend to see more dramatic price swings during market cycles.
“Altcoins can outperform Bitcoin in bull markets, but their volatility makes them riskier”, explained the head of research at CoinShares, James Butterfill.
Posting big gains
This year, altcoins have made impressive gains, with some tokens hitting new records.
Solana ($SOL), for example, reached an all-time high, and many others have doubled in value since the start of 2023. The rise has been particularly strong in November, marked by higher trading activity across the altcoin market.
The market recovery comes after a tough period following the collapse of major crypto platforms like FTX and Celsius in 2021. These events triggered a long bear market that dampened investor enthusiasm.
Despite the current momentum, not everyone believes the altcoin rally will last. Butterfill cautioned that upcoming regulations could significantly change the market.
For instance, Senator Cynthia Lummis has proposed the Bitcoin Act, which would use the Federal Reserve’s gold reserves to create a national Bitcoin reserve of 1 million $BTC.
“If this legislation passes, it could increase Bitcoin’s dominance and limit the growth of altcoins”, Butterfill noted.
Ethereum surges past $3,600
Altcoin king Ethereum ($ETH) is also making waves, crossing $3,600 for the first time in five months. This 15% increase over the past week has renewed optimism among investors.
One key driver is the record-breaking $22 billion in Ether futures open interest, a 23% increase in 30 days.
The last time futures activity reached such levels was when $ETH traded above $4,000 in May, with open interest then at $14 billion.
Currently, Ethereum continues its upward trend, gaining nearly 5% to stay above $3,600.
Institutional interest is a major factor in this rally. Platforms like the Chicago Mercantile Exchange (CME) now hold $2.5 billion in Ether futures, highlighting confidence in Ethereum’s long-term prospects.
Retail traders are also active, though with high risks. Between 23 and 26 November, $163 million in long $ETH futures positions were liquidated, reflecting the dangers of leveraged trading.
Still, sentiment remains positive, with $ETH perpetual futures funding rates steady at 2.1% per month.
A surge in positive sentiment
A recent report by crypto analytics firm, Santiment, highlights a wave of optimism around certain altcoins.
The report examined tokens with a market cap of at least $500 million and identified several that have seen a sharp rise in positive community sentiment.
Chainlink ($LINK) led the pack with a staggering 7081% increase in sentiment. Sui ($SUI) came in second with a 3883% rise, followed by USD Coin ($USDC) with a 3113% boost.
Other notable mentions included Toncoin ($TON), which rose by 1672%, and dYdX ($DYDX), which saw a 438% increase.
Smaller tokens also showed strong sentiment gains. Avalanche ($AVAX) and EOS ($EOS) recorded improvements of 405% and 362%, respectively.
Bitcoin Gold ($BTG) wasn’t far behind with a 360% rise, while Popcat ($POPCAT) and Gnosis ($GNO) posted 291% and 285% gains.
“This list shows how community sentiment is evolving, with older tokens like EOS and Bitcoin Gold competing alongside newer projects like Sui”, the report stated.
The mix of well-established tokens and emerging players highlights a shift in how investors are engaging with the crypto market.
While Bitcoin remains a key focus, altcoins are carving out their own space in the recovery, signalling a more diverse market ahead.
