The alternative cryptocurrency (altcoin) sector is still enjoying its resurgence due to continued investor interest in these digital assets amid Bitcoin's (BTC) rally to a new all-time high of $72,000.
Analysts of the crypto exchange Bitfinex revealed in the latest weekly report This investor interest in altcoins is diversifying towards meme coins and artificial intelligence (AI) projects.
Altcoins See Substantial Growth
The growing interest in altcoins is reflected in the market capitalization of the Total3 index, which tracks the price movements of all cryptocurrencies except BTC and Ether (ETH). Last week, CryptoPotato reported that the market capitalization of the index hovered around $640 billion; however, this figure surpassed $700 billion to reach a new high of $720 billion for the first time this cycle.
Although the index's market cap is 33% below its all-time high of $960.78 billion recorded in November 2021, it has come a long way from bear market levels of $450 billion, illustrating growth Substantial interest and investment in the altcoin.
Zoom in, AI-related projects, meme coins, dog-themed coins, and cat-themed tokens are some of the driving forces behind the altcoin resurgence. Bitfinex said the Meme Coin and AI indices on Coingecko rose 32% and 38% over the past seven days. Cat-themed coins, in particular, saw a 64% gain over the past week, recording a cumulative market cap of over $750 million.
The rise in the altcoin's market capitalization correlates with an increase in market activity on Ethereum, leading to higher transaction fees than seen for about two years. The network's annualized revenue is on track to surpass $10 billion, as more than $190 million was collected last week.
BTC Rally to Trigger More Liquidations
Meanwhile, Bitcoin's rise to $72,800 on March 11 could lead to significant liquidations for long and short traders, as shown by the asset's previous attempts to surpass its last all-time high of $69,000 .
Bitfinex warned that BTC traders will face increasingly leveraged and volatile markets in the near term. The scale of the risk was illustrated on March 5, when BTC rebounded to $69,000 before falling back to around $59,000 in four hours, triggering $1.18 billion in long and short liquidations.
“Even if you are correctly positioned in the markets, sharp price movements like those seen last week can lead to selloffs,” the analysts said.
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