On Friday, the 22nd of May, Bitcoin [BTC] bounced to $77.8k, and the altcoin market cap climbed back above the $1 trillion mark. For a few hours, it appeared that BTC would maintain its momentum and lead altcoins higher.
The day also marked Bitcoin Pizza Day, the day on which the first real-world BTC transaction occurred. Yet, despite the brief bounce, a crypto market sell-off commenced, and altcoins suffered a correction.
The relative altcoin strength has been declining
At the height of the recent bull market, the altcoin market cap [TOTAL2] reached $1.77 trillion. This figure was barely higher than the $1.71 trillion figure it reached in the 2021 bull run.
The weekly chart showed a range formation, and the mid-range level sat at $1.07 trillion. This level was retested as resistance earlier in May before facing rejection. The Friday downturn saw a brief spike above $1 trillion, followed by more downside.
Investor diligence and the importance of tracking capital rotation
On Bitcoin Pizza Day, only a few tokens, such as NEAR Protocol [NEAR], Artificial Superintelligence Alliance [FET], and Worldcoin [WLD], posted a green day. Most of the top altcoins, including the ones that showed bullish strength recently, saw losses.
This fact, on its own, seemed to indicate an AI sector focus among investors. However, we should also consider the strongest, relatively sizeable altcoins.
Hyperliquid [HYPE] and ZCash [ZEC] were some top performers, rallying 38.87% and 69.62%, respectively, in May. Ondo [ONDO] and Venice Token [VVV] have also shown bullish strength and were up 46.26% and 101.58% for the month so far.
Sixteen years ago, on this day, Florida programmer Laszlo Hanyecz bought two Papa John’s pizzas for 10,000 BTC, around $40 back then.
The same BTC would be worth $775 million today, but Hanyecz has asserted in interviews that he has no regrets about spending Bitcoin on pizza.
Ultimately, the price action on this particular day wasn’t encouraging, but the diligent investor can compare relative strength. With some investigative vigor and a little luck, they might find the altcoins best poised to outperform Bitcoin in the next cycle.
Final Summary
- Bitcoin Pizza Day saw price volatility across the market, and only a few altcoins held their own on the day.
- Tracking the trends of relative strength and combining narratives with usage potential for the next cycle can help investors predict the upcoming big names in crypto.