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Amid the looming fervor over the historic Bitcoin roll-out in El Salvador, the cryptocurrency market recovered to its highest level in almost four months on Monday afternoon, with a number of so-called altcoins (or cryptocurrency alternatives to Bitcoin and Ether) climbing to meteoric new highs and that Profit fueling, which has led JPMorgan analysts to warn, suggests the market may be ripe for a correction.

Bitcoin’s market share is at “uncomfortably low” levels – a historic sign of the market … [+] Foaming, analysts at JPMorgan warned on Monday.

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Important facts

The price of Solana’s Sol tokens rose nearly 19% to an all-time high of $ 164.47, continuing a week-long rally fueled by cryptocurrency support for vibrant non-fungible tokens.

Other top tokens leading the rally were Ripple’s XRP and Chainlink – up about 7% each – while recently soaring cryptocurrencies like Cardanos Ada and Dogecoin fell about 3% and 1%, respectively.

Although Bitcoin has lagged the broader market in recent weeks, Bitcoin’s price rose about 2% on Monday, topping $ 52,000 for the first time in nearly four months.

Nigel Green, the CEO of the $ 12 billion wealth consultancy DeVere Group, assessed the anticipation of the introduction of Bitcoin as legal tender in El Salvador on Tuesday as “a milestone in the development of the digital currency”.

However, in a customer announcement on Monday, Nikolaos Panigirtzoglou, Managing Director of JPMorgan, said retail investors have been pushing altcoins to new highs since the beginning of August, pointing out that the market share of Bitcoin and Ethereum fell from 78% on August 4th to around 67% is dwindling institutional interest in funds tied to the top two cryptocurrencies.

He points out that Bitcoin’s market share in particular looks “inconveniently low” in historical comparison – a likely expression of “froth and mania of private investors” as opposed to sustainable profits.

Crucial quote

“The August rally in non-fungible tokens and the increase in decentralized financial activity have helped not only Ethereum but also alternative cryptocurrencies that facilitate or enable smart contracts, such as Solana, Binance Coin and Cardano,” Panigirtzoglou said on Monday. “The previous phase of retail investor mania in the cryptocurrency markets was between early January and mid-May … and retail investors are making the cryptocurrency markets look frothy again.” After the bouts of retail investment craze in January and May, crypto markets slumped about 13% and 50%, respectively.

tangent

All in all, the value of global cryptocurrencies rose nearly 2% on Monday to a total of around $ 2.3 trillion, marking its highest level in days after prices plummeted from all-time highs in early May, according to crypto data website CoinMarketCap.

Surprising fact

In just a few months, cryptocurrency markets plummeted more than 85% after altcoins’ market share hit an all-time high of 55% in January 2018, Panigirtzoglou notes.

Key background

Along with the excitement surrounding NFTs, ongoing institutional acceptance and heightened inflation concerns have helped the cryptocurrency market reduce losses since regulation in China crashed nearly 50% in early May. The market is still about 10% below its all-time high, but has soared more than 45% in the last month. According to a study by the crypto hedge fund Nickel Digital, 49% of asset managers (who, with total assets of 275.5 billion, believe the fastest pace in almost 13 years.

further reading

Solana Overtakes Dogecoin as Ethereum Price Hits $ 4,000 for the First Time since $ 1 Trillion Crypto Crash (Forbes)