In the past three days, both Bitcoin and Ethereum have entered a consolidation. For BTC this meant trading between $ 39,000 and $ 42,000. For ETH, this meant a consolidation between $ 1,100 and $ 1,250.
While some fear this consolidation is a sign of an impending market top, altcoins have started to break out on the upside, with BTC and ETH gains spilling over into other segments of the cryptocurrency market.
Earlier this week, the altcoins that were recovering were all linked to decentralized funding (DeFi) on Ethereum. Yesterday and today the focus has shifted from DeFi to Altcoins from 2017, like IOTA and EOS.
2017-era altcoins are breaking out
The top performing cryptocurrencies today are almost all altcoins that performed extremely well in the previous bull market from 2016 to early 2018.
ZRX, the native token of the decentralized exchange protocol 0x, is up 25 percent in the past 24 hours, on top of the 40 percent gain it saw earlier this week.
The cryptocurrency is likely to benefit from the developments and increased use of Matcha, a decentralized exchange aggregator built by the 0x team.
IOST, MKR from MakerDAO, IOTA, EOS, Bitcoin Gold, TRX from Tron and Zcash are also among the cryptocurrencies that have risen by over 15-20 percent in the last 24 hours.
It’s worth noting that these coins had underperformed DeFi coins – suggesting that this recent price action is just a return to the mean.
Not all tokens rising today are 2017-era altcoins. Avalanche (AVAX) is up 42 percent.
The ghostchain narrative
Hiding behind this rally, however, is the fact that many of the coins that are moving up today, in effect, have no real acceptance or even potential use.
Freddie Farmer, the former head of DeFi at Wintermute Trading and industry analyst, currently comments on the matter as follows:
Even today, after DeFi saw an influx of capital and users, a large majority of DeFi projects are trading outside of the top 50 cryptocurrencies by market capitalization.
Analysts expect the crypto rankings to shift over time as investors begin to focus their capital on cryptocurrencies that have a fundamental purpose and / or entitle their holders to future cash flow.