Crypto analytics platform Santiment has found that the ratio of Bitcoin discussions among market participants has plunged to a three-month low, while traders have been distracted by several altcoins.
According to a Monday post on X, traders are afraid of missing out on pumps of smaller crypto projects and have sidelined Bitcoin to focus on them.
Traders Focus on Altcoins
Santiment disclosed that smaller projects like the decentralized application platform Loom Network (LOOM), decentralized lending protocol Cream Finance (CREAM), and the Solar blockchain (SXP) had seen surges in their chats and discussions, indicating greed among market participants.
Due to the focus on these projects, their native assets, LOOM, CREAM, and SXP, have recorded significant gains over the past few days. Within one week, LOOM has skyrocketed by over 144% to $0.11, CREAM soared by 65% to $17, while SXP spiked 2.5% and at writing time was trading at $0.28, per data from CoinMarketCap. The assets have also gained millions of dollars in market capitalization.
Alongside LOOM, CREAM, and SXP, the native assets of decentralized finance aggregation layer Frontier (FRONT), layer-2 blockchain ImmutableX (IMX), and decentralized oracle network Chainlink (LINK) are also outperforming the crypto market.
Sentiment said LINK, FRONT, and IMX might continue to surge due to bullish in-car metrics. The platform said LINK is one of the best crypto performers in September, with its price lifting when the asset moved to exchanges.
While LINK, LOOM, SXP, and IMX have large market caps running into hundreds of millions of dollars, altcoins like CREAM and FRONT have smaller market caps below $39 million.
BTC’s Liquidity Diminishes
Bitcoin (BTC), on the other hand, seems to be in a precarious situation as liquidity and trading volume have dwindled. Since Q1 2023, a small amount of BTC has been circulating on exchanges. As of August, the asset’s supply on trading platforms had declined to levels last seen in December 2017.
CryptoPotato reported that dwindling market liquidity is one of the major factors restricting BTC’s price growth. Bitcoin’s spot and derivatives trading volume have declined by 94% and 73% since March 2024.
Meanwhile, Santiment found that the number of addresses holding less than 100 BTC – about 41.1% of the asset’s supply – has reached a new all-time high.
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