Litecoin, Dogecoin, and large-cap altcoins surged when Bitcoin’s price hit $ 23,800

Litecoin (LTC) and Dogecoin (DOGE) are rising strongly while Bitcoin (BTC) struggles to stay above $ 23,800. Many analysts say that the rise in large-cap altcoins is directly related to Bitcoin’s price action and historical data shows that the two tend to move in tandem when BTC goes through bullish and bearish cycles.

As altcoins start to show signs of new momentum, traders become even more confident in the strength of the BTC trend.

Throughout December, altcoins stagnated compared to Bitcoin, particularly when BTC struggled to break out of the $ 18,000 to $ 19,400 range, but this was in an environment plagued with low volume.

At the time, the volume of the cryptocurrency market was in decline as Bitcoin continuously rejected the $ 19,400 level. As such, most of the volume went to BTC and the altcoin market was temporarily deprived of commercial activity.

LTC / USDT 4-hour chart. Source: TradingView.com

Bitcoin’s breakout above $ 20,000 reignited interest in Litecoin and Dogecoin

Historically, after a major Bitcoin rally, altcoins that existed between 2011 and 2014 tend to rise. These cryptocurrencies include Litecoin, Dogecoin, and XRP.

One of the main reasons behind this rally in altcoins is volume. Traders like to pump altcoins, which causes the volume to increase in a short period and we see huge volatility.

Since these cryptocurrencies have significant historical relevance, When a rally begins, its momentum typically lasts longer than other smaller-cap altcoins.

Litecoin, for example, is up more than 57% in the last 7 days. In the same period, Bitcoin rose 34%, despite surpassing $ 23,800 on major exchanges.

One positive trend that analysts have detected is that altcoins are not experiencing extreme volatility like they did in 2017. A pseudonymous trader named “MoonOverlord” He said:

“One thing that never happened on this run was people getting rid of their $ ALTS every time $ BTC moved 5% in 2017. I swear to God you’ll look up, and bang, the alts would be 25% less. on a 4% BTC move it was horrible. Tether and stables didn’t really even exist, so you had to be $ btc OR $ alts “.

Are fundamentals driving the current increase?

According Qiao Wang, a quantitative trader and DeFi researcher, Litecoin is not necessarily ‘digital silver’ in the same way that analysts view Bitcoin as ‘digital gold’.

Since its launch, The argument in favor of Litecoin was that it could act like silver if Bitcoin is converted to gold 2.0. Wang He said:

“If you’re new to the space, buy BTC and wonder what crypto asset is silver versus gold (BTC). It’s not LTC. It’s ETH. The other day Paul Tudor Jones used an interesting analogy from the world of metals to categorize crypto assets. There are “precious cryptocurrencies.” And there are industrial cryptos. BTC is precious. ETH is industrial. LTC is none. “

Litecoin has several strong fundamental factors that could make the market sentiment around it improve. For example, The Litecoin team is enabling MimbleWimble, a privacy solution initially designed for Bitcoin.

However, these fundamentals are not enough to drive a 57% rise in one week. The main reason behind the abrupt rally in large-cap altcoins is likely a volume game on the part of high-net-worth investors and traders. looking to make money quickly after Bitcoin’s rally.

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Litecoin, Dogecoin, and large-cap altcoins surged when Bitcoin’s price hit $ 23,800

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