Last week, we stressed how the Weiss Crypto Price Indexes blasted clear through critical resistance levels and how it paved the way for a further, accelerated move to the upside.
This week, that’s precisely what we got!
To casual observers, this rally, which began in mid-December, may feel like the big crypto rallies of 2019. But …
The current rally is actually quite different: Back in 2019, it was led mostly by Bitcoin and the biggest names. This time, it’s largely led by the risker names. And this “risk-on” environment is a telltale sign of confidence returning to crypto.
To understand how, let’s start with a broad overview of the markets for the week that ended Thursday, Feb. 13. For this we turn to our Weiss 50 Crypto Index (W50), which was up 15.61%.
Looking at the space minus Bitcoin, we find that the Weiss 50 Ex-BTC Crypto Index (W50X) was up 22.43% on the week, led largely by Ethereum which surged 33%.
Splitting the markets by market cap, we find more evidence of the risk-on environment:
First, the Weiss Large-Cap Crypto (WLC) Index was up 14.74%.
The Weiss Mid-Cap Crypto Index (WMC) was up even more — 20.36% on the week.
And third, the Weiss Small-Cap Crypto Index (WSC) beat them all, up a hefty 28.61%.
Once again, the smallest (and riskiest names) are leading the charge higher … the large caps underperform … and the mid-caps track in between the two.
This is critical. So, it bears repeating:
Now, one year later, precisely the opposite is happening: The altcoins are jumping ahead, while Bitcoin struggles to play catch-up.
Crypto traders call this “altcoin season.” I say …
It’s the kick-off of the second major phase of the bull market that began just over one year ago.
It promises to be long-term and sustainable.
And, with the Bitcoin halving expected in May, it could heat up still further in the first half of 2020.
One caveat: All this has helped postpone a long-overdue short-term correction. But our model continues to signal overbought conditions for now. So, don’t be surprised if you see a price pullback that’s sharp but brief.