Altcoins in the Crypto Market Outperforming as Bitcoin Price Moves Closer to $50,000

After the impressive surge of Bitcoin in recent weeks, smaller and less popular digital currencies are now surpassing it in performance.

Cardano was up as much as 30% on Friday, Solana was up around 8% and Avalanche was up 12%. Meanwhile, Bitcoin rose by about 2% and Ether fell by about 1%. Together, the two largest tokens account for about 70% of crypto’s $1.6 trillion market cap.

“After the huge rallies Bitcoin and Ethereum have seen, it’s no surprise they’re breathing a little sideways,” said Matt Maley, market strategist at Miller Tabak & Co. “However, the fact that these altcoins are rallying so strongly today tells me that people haven’t lost their love for the general asset class.

Solana is one of the blockchains competing with Ethereum, crypto’s main commercial highway, for a bigger share of digital asset activity.

Options traders are betting that Bitcoin will hit $50,000 by January, when many market watchers expect the SEC to finally allow exchange-traded funds to hold the cryptocurrency directly.

“I expect the current uptrend to continue as Bitcoin pushes towards 50,000, where option strikes will cluster,” said Teong Hng, CEO of crypto investment firm Satori Research.

Bitcoin has surged more than 60% since mid-October as speculation jumped that the Securities and Exchange Commission was on the verge of signing off on ETF applications such as asset management powerhouse BlackRock. The token was trading at around $44,100 on Friday.

“Today’s Bitcoin price action shows that while it is sensitive to interest rate expectations, it is not the primary driver,” said Craig Erlam, senior market analyst at Oanda. “Crypto traders have been increasingly bullish ever since it became clear that it is more about when the ETF will be approved. Lower prices simply help this move.”