A must-buy currency in the bull market? Sector rotation chart: “These 3 coins” are recovering
In addition to Bitcoin ($BTC), what other coins are worth investing in this bull market? Omkar Godbole, senior analyst and market editor-in-chief of the currency circle foreign media "CoinDesk", recently pointed out that according to sector rotation chart (RRG) data, Ripple ($XRP), Chainlink ($LINK) and Ethereum ($ETH) have recovered. sign.
Godbole showed the latest 12-week sector rotation chart data from Fairlead Strategies. This chart is used to measure the relative strength and momentum of multiple assets (altcoins) relative to the benchmark asset (Bitcoin), and is presented in four large quadrants.
As shown in the chart below, the X-axis measures the relative strength of altcoins relative to Bitcoin, while the Y-axis presents momentum changes in altcoin performance. The four quadrants represent the following information:
Leading (upper right): represents strong relative strength and positive momentum
Weak (lower right): Represents relative strength but negative momentum
Lagging (lower left): Represents weak relative strength and negative momentum
Improvement (top left): Represents weaker relative strength but positive momentum
Source: CoinDesk
12-Week Altcoin V.S Bitcoin Sector Rotation Chart (RRG)
As can be seen from the RRG chart, $XRP, $ETH, and $LINK have moved from the lagging quadrant to the improving quadrant together, which means that compared with Bitcoin, these three coins have weaker relative strength but their momentum is increasing.
Fairlead Strategies analysts noted that the RRG chart can be used to assess the cyclicality of top altcoins relative to the Bitcoin asset. Some altcoins have seen less downward momentum compared to Bitcoin, with $LINK only belatedly joining $ETH and $XRP in the improving quadrant.
Three more altcoins have fallen into the weak quadrant
When a currency moves from the laggard to the improving quadrant, it usually represents an opportunity for sector rotation in the cryptocurrency market in the coming weeks. As investors seek exposure to potential altcoins in the cryptocurrency market, capital may flow into coins that enter the Improvement Quadrant.
Analysts pointed out that momentum traders also tend to view coins that enter the improvement quadrant as a potential opportunity. In addition to showing signs of improvement, these coins may also outperform the market in the near future.
On the other hand, Dogecoin ($DOGE), Solana ($SOL), and Bitcoin Cash ($BCH) are in the Weakness Quadrant and the Left Point, showing continued underperformance and imminent drop to the Lagging Quadrant. The remaining top altcoins are already in the laggard quadrant, which represents underperformance relative to Bitcoin and poor momentum performance.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
