According to CoinDesk, Fairlead Strategies' recent analysis of the 12-week relative rotation graph (RRG) of top alternative cryptocurrencies (altcoins) in relation to Bitcoin (BTC) suggests that XRP, Chainlink's LINK token, and Ethereum's Ether (ETH) are showing signs of improvement. The RRG is a visual tool that measures the relative strength and momentum of multiple assets compared to a benchmark, in this case, BTC. The graph is divided into four quadrants: leading, weakening, lagging, and improving, each representing different stages of relative strength and momentum.
XRP, ETH, and LINK have moved into the 'improving' quadrant from the 'lagging' quadrant, indicating that while these coins still have lower relative strength compared to BTC, their performance is gaining momentum. 'We use RRGs to evaluate cyclicality among the top altcoins normalized versus bitcoin. A few altcoins have less downside momentum versus bitcoin, with Chainlink joining Ether and Ripple in the Improving quadrant,' analysts at Fairlead Strategies noted.
This shift from the 'lagging' to the 'improving' quadrant suggests a potential rotational opportunity in the coming weeks. Capital might flow into the improving sector as investors seek exposure to resilient corners of the crypto market. Momentum traders often view the cross into the 'improving' quadrant as a potential opportunity, indicating that the asset is showing signs of improvement and may outperform in the near future.
However, DOGE, SOL, and BCH are in the 'weakening' quadrant and point left, indicating a continued underperformance and an impending move to the 'lagging' quadrant. The remaining top altcoins are already in the 'lagging' quadrant, exhibiting both underperformance and negative momentum relative to BTC.