ETC (Ethernet Classic), Filecoin, and Lido DAO(LIDO) are dominating altcoins as they have outperformed Bitcoin and other large cryptocurrency. The market-cap first crypto has had its most successful month in 2022. However, this is still far behind the average monthly return for 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”. The month of July is a landmark for digital assets.
The emergence of two crucial sectors in the asset class, non-fungible tokens and decentralized finance (DeFi), has been evident over this time. This rally is especially good news for mid-cap cryptos, as you can see below.
Market rallies have led to a decline in Bitcoin and other stablecoins market shares, which suggests an increase of risk appetite by crypto investors and increased 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 could be crucial for understanding 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, Ethereum Classic and others could be benefited by the shift to this blockchain. This cryptocurrency is now rallying because there are more Ethereum users who want to place their Ethereum to participate in Ethereum 2.0’s consensus model and receive rewards.
Ethereum Classic is showing positive results, possibly because it could be a safety haven for ETH miner. This sector faces inevitable destruction as ETH’s new consensus model will validate transactions with a different mechanism.
Altcoins Will Seek More Bullish Momentum from The Merge
In that sense, and up to “The Merge” mainnet launch, altcoins might continue to extend their bullish trajectory. This data was provided by a pseudonym user. It highlights how important this event is and why it could inject new capital into the ecosystem, further driving up the Ethereum price and altcoin sector.
According to the user, this cryptocurrency is going to be friendly for environmental, social, and governance (ESG). This will provide new institutions with the confidence to bet on Ethereum’s long-term success. User said:
It doesn’t matter what your opinion on ESG is, mainstream adoption requires that the story around sustainability and emissions be controlled. Bitcoin is choosing to ignore the problem; Ethereum’s unlatching from PoW should be positive for both assets.