- Capital is rotating into other altcoins led by ETH.
- Ethereum’s TVL increased by 73.78%, indicating high altcoin interaction.
Ethereum’s [ETH] rise above $3,900 could be the catalyst that changes the market dynamics and helps altcoins climb higher than they have.
Ever since Bitcoin [BTC] hit a new all-time high, ETH has been outperforming it. This brought about the notion that Bitcoin’s dominance might have taken a step back.
Whenever this happens, ETH’s price performs better. But the second most valuable cryptocurrency is not always the only beneficiary of this flipping. Most times, profits gained from ETH and BTC increase flow into other altcoins.
ETH is set to kickstart the ride
AMBCrypto analyzed on-chain data from Santiment to check if it was the case this time. According to our analysis, we observed that capital has been rotating into other cryptocurrencies. Some of these include Render [RNDR], Fetch.ai [FET] and Fantom [FTM].
We arrived at this conclusion after assessing the whale transactions valued over $100,000. At press time, these large transactions have been occurring since the 5th of March.
But the ones recorded in the last 24 hours have been enormous, indicating that the much-anticipated altcoin season was here.
Source: Santiment
Altcoin season is a terminology used to describe a market boon when other cryptocurrencies outperform Bitcoin. But something AMBCrypto noticed about the aforementioned cryptocurrencies was that they were all ERC-20 tokens.
For those unfamiliar, ERC tokens refer to fungible assets created on the Ethereum blockchain. Therefore, one can conclude that there was high interest in ETH and other assets linked to the network.
If capital continues to flow into these assets, other tokens built on Ethereum might follow. How about the Total Value Locked (TVL)?
Assets locked proves that it’s time
According to DeFiLlama, Ethereum’s TVL was $55.30 billion. This value represents a 73.78% increase in the last 30 days.
The TVL is an indicator of a protocol’s health. When it decreases, it means the protocol lacks an inflow of liquidity. This could also mean that market participants do not trust the blockchain enough to produce good yields.
On the other hand, an increasing TVL suggests that participants perceive the project to be trustworthy. Thus, the network enjoys a wave of capital flow which improves its health. This was the case with Ethereum.
Source: DeFILlama
If participants continue to bridge assets into Ethereum, the TVL might close in on its previous all-time high.
Realistic or not, here’s FET’s market cap in ETH terms
A rise toward $106 billion could also affect ETH’s price. Should this be the case, ETH could rise past $5,000 at the peak of the bull market.
Also, other altcoins might not be left out. For instance, FET, which has seen a 377% 90-day increase might trend higher. FTM’s price might also rise in the $3 direction while RNDR’s price could also swing upwards.
This news is republished from another source.
