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Bitcoin has done well for itself in 2020, making it the top mainstream investment of the year so far. But deeper in the crypto market, Bitcoin’s gains look meager next to even its next closest asset in line, Ethereum.
Ethereum and DeFi tokens outperformed Bitcoin easily this year so far, but that trend is “done” according to an asset manager. The same asset manager also nailed calling the initial rise against BTC, and they very well could be correct again about what’s to come next.
Ethereum Is “Done” Outperforming Bitcoin, According to Asset Manager Avi Felman
Since early 2018, Bitcoin has trounced altcoins and sent them into apocalypse mode. While the first-ever cryptocurrency fell only 84% to its bear market bottom, altcoins, even the most prominent ones like Ethereum fell over 90% and then some. Several eliminated as much as 99% from their valuations.
Calls for altcoin season, often led by Ethereum or Litecoin, had become the butt of jokes. The once-popular opinion fell out of favor, until Avi Felman, head of trading at crypto asset management firm BlockTower Capital, did so again mid-June.
Related Reading | XRP Up-Move To Leave Bitcoin And Tether Traders “Sidelined”
From mid-June forward when Felman presented a “bull case” for Ethereum far outperforming Bitcoin, the top-ranked altcoin and blockchain central to the DeFi trend, Etheruem, did just that.
Now Felman says that this change in trend is “about done,” which means a reversal or potentially some stagnancy between the two top crypto assets.
ETHBTC Daily Triangle Overperformance "Done", Wedge Underperformance Coming | Source: TradingView
ETH/BTC Ratio To Drag Down DeFi, Other Altcoins Could Benefit
If the Ethereum ratio further falls against Bitcoin, it could be far worse for DeFi tokens still up an enormous amount due to the sudden flood of capital into the low-cap illiquid coins.
DeFi tokens are already down an average of about 60% across the board, with Yearn.Finance, Uniswap, Sushi, and several others performing the worst of the bunch.
Related Reading | Ethereum Leads DeFi Tokens On A 60% Average Fall From Summer Highs
Ethereum has held up relatively well comparatively, but if the second-ranked cryptocurrency behind Bitcoin, starts to fall on its ratio also, DeFi is in a lot worse trouble.
Felman didn’t share any comments referencing DeFi, but Ethereum being so central to the trend and showing such weakness, could drag these tokens down further.
Money from the DeFi trend could flow into not only Bitcoin but other non-DeFi altcoins like XRP, that have since lagged behind the rest of the market.
XRP, for example, has been showing signs that its ready to regain some lost ground against both Bitcoin and Ethereum, and could benefit enormously from the flood of funds coming back out of decentralized finance.
Featured image from Deposit Photos, Charts from TradingView
