Ethereum Classic (ETC), Filecoin (FIL), and Lido DAO (LIDO) have been dominating the altcoin sector as they outperform Bitcoin and other large cryptocurrencies. The first crypto by market cap has been recording its best month in 2022 but is still far from the monthly average return from these tokens.
According to Arcane Research, altcoins have seen an average of 40% performance over the past month as the crypto market experienced a “classic relief rally”. July has been a historical green month for digital assets.
During this period, the nascent asset class has seen the expansion of two critical sectors, decentralized finances (DeFi) and non-fungible tokens (NFTs). As seen below, the rally has been particularly positive for mid-cap cryptocurrencies.
This market rally has translated into a reduction of Bitcoin and stablecoins market share, suggesting an increase in risk appetite for crypto investors, and more strength for Ethereum. Arcane Research noted:
Ether’s lack of strength relative to bitcoin last week has been reversed this week, as ether has increased its market share by 0.43 percentage points, while bitcoin has lost 0.22 percentage points. Notably, bitcoin and stablecoin are losing market share this week (…).
Ethereum might be critical for understanding the current price action. The cryptocurrency has a tentative deployment date for “The Merge”, the event that will combine its execution layer (Proof-of-Work) with its consensus layer (Proof-of-Stake).
Altcoins, such as Lido Dao and Ethereum Classic, might benefit from the imminent shift in this blockchain. The former cryptocurrency has rallied because more users want to stake their ETH and participate in Ethereum (2.0) consensus model to receive rewards.
Ethereum Classic has seen positive performance because it might become a safe haven for ETH miners. This sector faces inevitable destruction as ETH’s new consensus model will validate transactions with a different mechanism.
Will The Merge Provide Altcoins With Further Bullish Momentum
In that sense, and up to “The Merge” mainnet launch, altcoins might continue to extend their bullish trajectory. Data from a pseudonym user highlights the importance of this event and why it might inject fresh capital into this ecosystem further driving the price of Ethereum and the altcoin sector.
The user claims this cryptocurrency will…
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