• Bitcoin and Ethereum experienced a dip in price during the latter half of May while smaller altcoins such as XRP, Litecoin, Sandbox, and Axie all saw significant price hikes.
• Analysts refer to this phenomenon as an “altcoin season” where traders and investors shift their attention away from mainstream tokens like BTC and focus on smaller assets.
• Despite these gains, volatility remains an issue for the crypto market and there are still signs of frothiness.
Altcoins Rise Last May While BTC Suffered
Last May, as Bitcoin and Ethereum were taking price dips, altcoins – like XRP (Ripple) and Litecoin – were exploding. During that time, Litecoin and Ripple endured price hikes of about five percent each, while others – like Sandbox – rose by as much as four percent. Axie also saw its price shoot up by a whopping eight percent. These numbers may not seem like much but it was unusual that these currencies were able to travel in an entirely different direction than bitcoin.
The Start Of An “Altcoin Season”
Some analysts believe that this could have been the start of what they’re calling an “altcoin season” where people start to shift some of their attention away from larger, mainstream tokens like BTC to focus on smaller assets resulting in certain price hikes on a temporary basis. Retail traders feel safe enough to try out other smaller coins because bitcoin is still there for them to enjoy should things go wrong with the investments they make into the lesser-known digital currencies.
Volatility Remains An Issue
Noelle Acheson commented that despite all this activity surrounding altcoins, activity remained relatively low for these digital currencies and volatility still remains an issue for the crypto market with signs of frothiness being present at press time.
Investors Need To Be Cautious
It is important for investors to remember that investing into any asset comes with risks no matter how small or large it may be so caution needs to be taken when making decisions on which cryptocurrency you invest your money into. It’s also important to remember that prices can go up just as quickly as they came down so investors need to mindful when entering positions or exiting them in order to maximize their returns without putting their capital at too much risk.
Overall, last May proved interesting with altcoins being able to move in a different direction than Bitcoin even though usually it takes something bigger like Bitcoin going up before they can follow suit. Although these coins did see some nice gains during this period it is important for investors not get too carried away with any investment decisions they are making due the volatile nature of cryptocurrencies which could result in losses if one isn’t careful enough when entering or exiting positions.