Despite Bitcoin’s hesitation to climb above the $ 48,000 mark this week, its global crypto market cap was worth $ 2.04 trillion at the time of writing. Most of the top alts have had a pretty decent week and have made satisfactory profits for their HODLers.
Compared to other altcoins, Stellar and Bitcoin Cash managed to steal the limelight by rising 32.39% and 21.98%, respectively. However, the past day was not so great for either of the alts. Their respective values only increased by 3% each.
XLM and BCH were actually trading at $ 0.39 and $ 700.3 at the time of writing. So is this a sign that their rally is coming to an end, or will their respective prices rise even faster once the brakes are released?
For Stellar, the number of active addresses peaked on August 11 (0.14 million). However, this shrank massively in the next few days and was only 47.5k at the time of going to press. The decline in the number of DAAs essentially implies that the Stellar blockchain isn’t as active right now compared to a few days ago. The active addresses of BCH, on the other hand, recorded a slight increase from 98.6 thousand to 0.12 million euros in the same period.
The realized cap dates for these two alts also supported the narrative mentioned above. As can be seen from the attached graph, the BCH’s realized upper limit recently peaked in the one-month framework. At the time of writing, it was valued at $ 7.83 billion.
Ultimately, this means that the coins that were last moved at lower prices have been issued. This action would eventually price them higher. Conversely, Stellar’s realized market capitalization decreased slightly from $ 13.98 billion to $ 13.91 billion in the same month window. Therefore, at this stage, it doesn’t make much sense to expect a dramatic change in the price of this alternative.
Correlation and Volatility
The volatility of these two alts has, by and large, been spending more time on the downside lately. The measured value of this metric was explicitly 0.88 (Stellar) and 0.70 (Bitcoin Cash) when writing. Whenever volatility stayed on the downside, these two alts were unable to hit higher trading targets.
For example, when the volatility of XLM shrank from 1.89 to 1.15 in the period May-June, the value of the Alt fell by almost 40% at the same time. It is important, however, that an extremely volatile environment has the potential to cause prices to swing in either direction. Ergo, a slight increase compared to the current level should be able to support the price increase in the long term.
Additionally, according to data from Cryptowatch, the correlation of XLM with Bitcoin hasn’t been as strong lately. In fact, it has been spinning in the 0.5-0.6 range for the past few days. The dependence of BCH on the price movements of Bitcoin, on the other hand, appeared to be comparatively strong (0.95).
Well, with the state of the above metrics in mind, it can be concluded that BCH has the potential to outperform Stellar in the days ahead. However, so that the former can recover, the number of active addresses must increase together with the implemented upper limit.