On Friday, May 22, Bitcoin [BTC] bounced to $77.8k, and the altcoin market cap climbed back above the $1 trillion mark. For a few hours, it looked like BTC would maintain its momentum and lead altcoins higher.
The day also marked Bitcoin Pizza Day, the day the first real BTC transaction took place. But despite the brief rebound, a sell-off began in the crypto market and altcoins underwent a correction.
The relative strength of altcoins has declined
At the height of the recent bull market, the market cap of altcoins [TOTAL2] reached $1.77 trillion. This figure was barely higher than the $1.71 trillion figure it reached during the 2021 bull run.
The weekly chart showed a range formation, with the mid-range level at $1.07 trillion. This level was retested as resistance earlier in May before being rejected. Friday’s downturn saw a brief spike above $1 trillion, followed by more downward developments.
Investor diligence and the importance of monitoring capital rotation
On Bitcoin Pizza Day only a few tokens, such as NEAR Protocol [NEAR]Artificial Super Intelligence Alliance [FET]and World Currency [WLD]posted a green day. Most of the top altcoins, including those that recently showed bullish strength, saw losses.
This fact in itself seemed to indicate a focus on the AI sector among investors. However, we must also take into account the strongest, relatively sizable altcoins.
Hyperfluid [HYPE] and ZCash [ZEC] were some of the top performers, up 38.87% and 69.62% respectively in May. Ondo [ONDO] and Venice Token [VVV] have also shown bullish strength, rising 46.26% and 101.58% year to date.
Sixteen years ago, on this day, Florida programmer Laszlo Hanyecz bought two Papa John’s pizzas for 10,000 BTC, about $40 at the time.
The same BTC would be worth $775 million today, but Hanyecz has claimed in interviews that he does not regret spending Bitcoin on pizza.
Ultimately, the price action on this particular day was not encouraging, but the diligent investor can compare the relative strength. With some research and a bit of luck, they may discover that the altcoins are best poised to outperform Bitcoin in the next cycle.
Final summary
- Bitcoin Pizza Day saw price volatility across the market, with only a few altcoins holding steady that day.
- Monitoring relative strength trends and combining stories with usage potential for the next cycle can help investors predict the emerging big names in crypto.