Ethereum
XRP, LINK, ETH stand out against BTC in sector rotation analysis and DOGE struggles
Crypto traders looking for clues to pockets of the crypto market that are seeing signs of green shoots might want to consider (XRP)Chainlink (LINK) Ethereum token and ether (ETH).
That’s the message from Fairlead Strategies’ latest analysis of the 12-week relative turnover chart of leading alternative cryptocurrencies (altcoins) versus bitcoin. (BTC).
The Relative Rotation Chart (RRG) is a visual representation of the relative strength and momentum of multiple assets (altcoins) against a benchmark index (BTC). The x-axis measures the relative strength of altcoins against BTC and the y-axis indicates the momentum of altcoins’ performance.
The chart includes four quadrants: leading, weakening, lagging, and improving. The main quadrant (top right) indicates strong relative strength and positive momentum, weakening (bottom right), strong relative strength but negative momentum. Lag (bottom left) represents weak relative strength and negative momentum and enhancement indicates weak relative strength but positive momentum.
XRP’s move into the improving quadrant from the lagging quadrant, accompanying ETH and LINK, indicates that all three coins still have lower relative strength than BTC, but their performance is gaining momentum.
“We use RRG [relative rotation graph] to assess cyclicality among top altcoins normalized to bitcoin. A few altcoins have less downward momentum than bitcoin, with Chainlink joining Ether and Ripple in the improving quadrant,” Fairlead Strategies analysts said in a note to clients on Monday.
The positive shift from the lagging to the improving quadrant suggests that a rotation opportunity may present itself in the coming weeks, whereby capital could flow into the improving sector as investors seek exposure to the resilient corners of the crypto market.
Momentum traders tend to view the move into the improvement quadrant as a potential opportunity, indicating that the asset is showing signs of improvement and could outperform in the near future.
DOGE, SOL, and BCH are in the weakening quadrant and pointing to the left, indicating continued underperformance and an impending shift to the lagging quadrant. The remaining top altcoins are already in the lagging quadrant, exhibiting both underperformance and negative momentum against BTC.