Layer 1 tokens ADA, ALGO, AVAX and SOL among best performers as capital rotation from stalling BTC lifts altcoins.Bitcoin may revisit $40,000 to “fill CME price gap,” crypto analyst Willy Woo speculated.Native tokens tied to layer 1 (L1) blockchains gained the most Friday, with Cardano (ADA) being the best performer, as steady bitcoin (BTC) price fueled capital rotation to altcoins.
Bitcoin bounced between $43,000 and $44,000 during the day, quickly shaking off a minor dip following a stronger U.S.employment report than analysts expected that dampened interest rate cut expectations for next year.
The top crypto was recently trading at around $43,800, consolidating as investors digested its swift rally to near $45,000 this week after its breakout from $38,000 a week ago.
Altcoins, meanwhile, jumped across the board, resembling early November’s ” altcoin rotation ” when slowing bitcoin momentum drove traders to realize some gains and invest in smaller, riskier cryptocurrencies.These capital rotations are typical in the crypto markets after large bitcoin run-ups, followed by a rally in bigger crypto assets then among meme coins and micro caps as traders chase tokens that haven’t moved yet to profit.
ADA surged 25% to 57 cents at one point during the day, its highest price since August 2022.It gave up some of the early gains later in the day, but was still up almost 20% today.
Other notable top performers were native tokens of Polkadot (DOT) , Algorand (ALGO) , Avalanche (AVAX) and Solana (SOL) , which posted 7%-11% gains.
The CoinDesk Market Index (CMI) , a basket of almost 200 cryptocurrencies, was up 1.5% through the day, more than BTC, underscoring altcoin outperformance.
What’s next for BTC As bitcoin’s momentum stalled, some analysts speculated about a potential pullback to retest lower price levels.
Bitcoin-focused analyst Willy Woo eyed a price level between $39,000-$41,000 based on a price gap in the Chicago Mercantile Exchange (CME) bitcoin futures market, which BTC might “fill” sometime in the future.
These price gaps occur because the CME futures market , unlike native crypto exchanges like Binance or Deribit, don’t trade around the clock, and there could be a difference between closing and opening prices depending on bitcoin’s price action when the market is closed.Some analysts reckon that asset prices tend to revisit these levels during a correction, filling the gap.
BTC rallied last weekend surpassing $40,000, when the CME futures market was closed, creating the price gap on the chart.
“By my count 28 out of 30 gaps have been filled on CME daily candles (93%),” Woo posted on X, formerly Twitter.
However, these gaps do not always get filled.For example, BTC hasn’t revisited the CME gap at around $20,000 yet, formed in March during the weekend collapse of Silicon Valley Bank (SVB).
Institutional inflows to bitcoin are “underappreciated” Despite a potential short-term pullback, bitcoin’s outlook is bullish, with growing interest among institutional investors, Hany Rashwan, co-founder and CEO of digital asset management firm 21.co , said in a Friday interview with CoinDesk TV.
Unmute Rashwan opined that market observers are “underappreciating” future inflows into BTC if – or once – a spot-based exchange-traded fund gets approved in the U.S, which will likely happen according to analysts.
“There are a lot of prospective buyers, who for various reasons wanted to invest in crypto but has been prohibited to do so” because of regulations, he said.Rashwan noted that 75% of inflows into digital asset funds during the year happened in the past 60-90 days.”That’s not normal,” he said, adding that it’s “a sign of change in sentiment across primarily institutional players.”
Read more: Crypto Funds Attract Largest Weekly Inflow in 2023 as Bitcoin ‘Short-Sellers Capitulate’
Rashwan prognosed all-time high prices for bitcoin, but not in the short term.
“I think we will beat the bitcoin all-time highs sometime in the next 12-18 months,” he said.”We are not fully out of the woods yet.”
Edited by Nikhilesh De.
Krisztian Sandor Krisztian Sandor is a reporter on the U.S.
markets team focusing on stablecoins and institutional investment.He holds BTC and ETH.
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