Crypto assets see new cycle highs as rally continues
|Last week, we discussed crypto assets showing signs that they’d break out to new cycle highs, as multiple sub-indices were showing positive momentum.
Well, that breakout happened, as multiple sub-indices rallied by double-digits and established fresh new highs to extend the rally that started March 13.
The Weiss 50 Crypto Index (W50) — the broadest industry benchmark — posted a 10.62% gain over the seven trading sessions ending Thursday, June 4.
Stripping out Bitcoin and looking at altcoins alone, we see even more robust performance. The Weiss 50 Ex-BTC Crypto Index (W50X) rallied 12.18%.
Breaking it down by market capitalization, however, reveals what may be some signs of exhaustion. Let’s start at the top ...
The Weiss Large-Cap Crypto Index (WLC) was up 9.53% for the week ended Thursday.
And the Weiss Mid-Cap Crypto Index (WMC) was up a remarkable 18.40%.
But the Weiss Small-Cap Crypto Index (WSC) was the clear laggard, as it moved up “only” 8.17%.
Last week, the small-caps provided most of the evidence that the broader crypto space was breaking to new highs. This week, the small-caps are showing the most weakness. Gains were concentrated mostly among the mid-caps, which is dominated by higher-tier altcoins.
It’s not just that small-caps surrendered the lead. It’s the way it happened: The breakout took place on Monday, it was met almost immediately with fierce selling and gains were entirety erased by Tuesday.
This mixed reaction to a new cycle high — in addition to relative weakness from the most “risk-on” assets in the industry — is good reason to question whether the impressive rally we’ve seen since the March 13 crash may be due for a pause in the weeks to come.
We’re also seeing traditional safe havens like gold and U.S. Treasuries take a breather. Those assets typically lead crypto markets — which is being considered by an increasing number of investors an “alternative” safe haven by many — by a few weeks.
Only time will tell if this crypto rally still has legs.
But this is a long-term story, and a “pause” here would be entirely reasonable. When one inevitably happens, it’ll leave crypto refreshed for a run to higher highs.
But the Weiss Small-Cap Crypto Index (WSC) was the clear laggard, as it moved up “only” 8.17%.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.