Altcoins have been bigger winners than bitcoin in the recent recovery. Even though the latter led the recovery, the smaller cap coins have been making all of the waves in space, outperforming other indexes and bitcoin included. All of this has pointed to an altcoin season after a purported ‘crypto winter’ and the gains recorded so far in February are additional proof of this.
Small Cap Index Takes The Lead
The whole of the crypto market had suffered from the downtrend that began in December. However, the second week of February had come to some reprieve with double-digit gains across bitcoin and all of the indexes. The small, mid, and large cap indexes have all returned gains so far, but the small cap has taken the leading, showing increased bullish momentum in the smaller cap altcoins.
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Just two weeks into February, the small cap index has seen gains as high as 19%. This is a huge step-up for the index after it closed out January as the worst-performing index, seeing accelerated losses compared to its counterparts. The tables have now turned as the gains for the small cap index have been 4% higher than all of the others.
Small cap index returns highest gains | Source: Arcane Research
Bitcoin, the mid cap, and the large cap index all returned doubled-digit gains for January. Most of the gains recorded were from a single week that saw prices surge across the crypto market.
What About Bitcoin?
Bitcoin has no doubt also returned impressive gains for its investors in the same time period. It may not be as high as the small cap index but still remains one of the top gainers n the space. It follows the move of the market sentiment from extreme negativity back into the positive. Momentum picking up has also helped in this case.
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The Digital asset is now trading above its 20-day moving average but remains low on the 50-day average. At its current point, the next resistance for the asset to break lies at $ 45,240. However, a break above a second resistance point at $ 46,712 is what will really solidify its entrance into another bear rally. Until then, it will likely continue to hover between $ 43,000 and $ 44,000.
BTC starts another recovery trend | Source: BTCUSD on TradingView.com
On the support side, bitcoin’s break below $ 43,000 will see its next support at $ 42,790. Not a far-off point, but if it does not hold then another decline to $ 40,000 may be imminent.
Nevertheless, the digital asset has shown strong sell signals around the 50 and 100-day moving averages. Unless buyers make significant headway in holding up the price of bitcoin, bears are more likely to take over, pulling bitcoin into another stretched-out downtrend.
Featured image from Forbes, charts from Arcane Research and TradingView.com