XRP, LINK, ETH stand out from BTC in sector rotation analysis, DOGE struggles

Crypto traders looking for guidance in the cryptocurrency market seeing signs of green momentum may consider (XRP), Chainlink token (LINK), and Ethereum ether (ETH).

That’s the conclusion of Fairlead Strategies’ latest analysis of the 12-week relative rotation chart of top alternative cryptocurrencies (altcoins) versus bitcoin (BTC).

A Relative Rotation Chart (RRG) is a visual representation of the relative strength and momentum of a multiple asset (altcoin) relative to a benchmark (BTC). The x-axis measures the relative strength of altcoins compared to BTC, and the y-axis indicates the dynamics of altcoin performance.

The chart consists of four quadrants: leading, weakening, lagging and improving. The leading quadrant (top right) indicates strong relative strength and positive dynamics, weakening (bottom right) indicates strong relative strength but negative dynamics. Lagging (bottom left) means weak relative strength and negative dynamics, and improving means weak relative strength but positive dynamics.

XRP’s move into the improvement quadrant from the lagging quadrant alongside ETH and LINK indicates that these three coins still have lower relative strength compared to BTC, but their performance is gaining momentum.

“We use RRG (relative rotation chart) to assess cyclicality among top altcoins normalized to Bitcoin. “Several altcoins have less downside momentum compared to Bitcoin, with Chainlink joining Ether and Ripple in the improving quadrant,” Fairlead Strategies analysts said in a note to clients on Monday.

The positive move from the lagging quadrant to the improving quadrant suggests there may be a rotation opportunity in the coming weeks that could see capital flowing into the improving sector as investors seek exposure to resilient corners of the cryptocurrency market.

Momentum traders typically view a move into the improvement quadrant as a potential opportunity, which indicates that an asset is showing signs of improvement and could outperform in the near future.

DOGE, SOL and BCH are in the weakening quadrant and pointing to the left, indicating continued poor performance and an imminent move to the lagging quadrant. The remaining leading altcoins are already in the lagging quadrant, showing both weaker performance and negative dynamics relative to BTC.