I’m not a financial advisor and this article is for entertainment purposes only. People lose money in crypto. Trade at your own risk.
Viewing cryptocurrencies in comparison to BTC rather than USD is a valuable metric. If we view BTC as the golden child of crypto and the influencer of the market in general it gives us an indication of a certain coin’s performance both through bear and bull markets.
The ATH (all time high) of ETH/BTC of 0.123799 in early 2018 shows today we’re about halfway at 0.063145 as of writing. The ATL (all time low) of 0.016150 shows the effects of the 2019 bear market; as BTC and the cryptocurrency market in general was struggling, ETH performed very poorly in comparison. The bull market of 2017 into early 2018 showed ETH outperforming BTC, the market repeated itself this year as ETH/BTC climbed from 0.022754 up to a high of 0.082400 in 6 months.
This trend repeats itself through other comparisons of currencies/BTC showing us that BTC is less volatile than altcoins. It’s less risky and holds up better than altcoins during bear markets. It also shows us that altcoins can slump pretty hard in bear markets but outperform BTC during bull runs. Keep this in mind when building your portfolio, BTC is riskier than many traditional assets such as bonds and most stocks, but offers more protection than altcoins during bear markets.
The price history of LINK shows a steady incline in price over time with smaller dips along the way. The LINK/BTC chart also show a similar, steady increase in price over time until late 2020 when the price of link took off, even outpacing BTC itself. The current market dip we’ve been in over the past month has saw BTC drop from an ATH of $64,000 to $29,000. A drop of 50%<. As we would expect with an altcoin, when bitcoin is in a bull run LINK outpaced it and when bitcoin has a pullback of 50%<, LINK suffered far worse moving from an ATH of $53 down to $14, a move of 70%<.
Looking at the LINK/BTC chart we can see the purple line (25 day moving average) follows just below the candles nicely up until the end of 2020 when BTC’s price began to move up. LINK then became relatively undervalued in comparison to BTC up until April 2021 when it broke past the moving average and reached a new ATH.
The recent LINK/BTC chart shows the candles moving below the moving average again over the past weeks, possibly showing a nice price to buy in at. The price today dropped below $18 momentarily, presenting a good buying opportunity. The history of steady price appreciation, solid fundamentals, solid dev team and founder and relatively undervalued price of LINK in comparison to BTC makes now a good time to add LINK to your portfolio.
/USD doesn’t tell the whole story and the performance of BTC influences the whole market. Use /BTC charts as another tool in analyzing the performance and current valuation of a cryptocurrency. Take LINK for example, if the price of LINK moved up 2% per day for 6 months and BTC also moved up 2% per day for 6 months, the LINK/BTC chart would show a steady sideways movement, the ratio of LINK to BTC would remain the same. Movements in the chart occur when the currencies move independently of each other and the ratio changes. If LINK moves up in price and BTC stays the same then LINK/BTC chart would move upwards, as we would expect to see in a bull market. If the price of BTC moved up and LINK remained the same price, the chart would move downwards, as we would expect to see in a bear market.
LINK has steadily been gaining value compared to BTC but a recent price crash has brought the LINK/BTC price below the 7 day and 25 day moving average and in the last 2 weeks and the 99 day moving average (red line) has acted as a line of support for the price for the third time since December 2021. This shows no matter the uncertainty in the markets the smart money sees the LINK/BTC ratio at a buying price at the 99 day average.