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Why did Ethereum and XRP dominate the altcoin rally in 2020?

2020 altcoins rally did not reach the entire market evenly, as it did in 2017

Bitcoin’s dominance is one of the biggest motivators behind its institutional interest and conventional adoption. However, in anticipation of an altcoin rally, it was observed that the Ethereum and XRP domain increased by 1.1% and 2.6%, respectively, based on data from the CoinGecko report.

Against the gradual recovery of the Bitcoin price, Ethereum’s price increased by more than 50% in November and broke $ 600 for the first time since 2018. These two altcoins stood out for their high trade volume, while Bitcoin’s trade volume on spot exchanges increased by 3.6 billion or 18.8% from November 1 to the time of publication of this text. Despite a price hike, its dominance was limited to 65.7%, unlike the 2017 rally.

Top 30 domain-based cryptocurrencies || Source: CoinGecko

The rise in altcoins was more motivating and the lack of rapid institutionalization left room for price volatility. These two major altcoins, ETH and XRP, dominated the altcoin rally among the top 10 cryptocurrencies based on market capitalization. The altcoins rally was the one that broke several records for ETH, against other altcoins. Based on the data provided, ETH’s total open interest contracts have increased 50-fold this year and are approaching $ 1 billion.

Why ETH and XRP dominated the altcoin rally in 2020

Total options ETH OI || Source: Skew

What’s interesting here is that an altcoin rally has always been viewed through the lens of a Bitcoin bull run, however, the current altcoin rally has been more dominant in terms of volatility, responsiveness and trade volume compared to the Bitcoin bull run.

Other competitors were Litecoin and Chainlink, however, based on market capitalization and trade volume, Ethereum and XRP dominated last season and offered double-digit returns on portfolios. Although DeFi gave retail traders a chance to invest, XRP and ETH closed the month with a higher price increase than Bitcoin. Against Bitcoin’s 42% rise, XRP saw its month-on-month growth skyrocket by + 177%.

altcoins rally

5 main cryptocurrency price returns || Source: CoinGecko

In addition to better performances than Bitcoin and DeFi, XRP offered a 177% return in November, and that was a surprise to most traders. The triple-digit returns made XRP the best performing high on altcoin and it is likely that rising altcoin prices have increased retail traders’ interest in HODLing.

Source: AMBCrypto

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