Wolfe Research analysts urge investors to broaden their investments in digital assets, stating that it is time to more actively shift to altcoins.
After strong growth in Bitcoin and Ethereum, the broker's analysts see increasing momentum across the broader cryptocurrency market, and technical signals indicate a potential breakout.
"The median coin we track has risen 23% since the beginning of the month, as momentum has intensified across the spectrum," wrote Rob Ginsberg from Wolfe in a report on Wednesday.
Ethereum, in particular, led the recent rise, climbing more than 100% since April 20, as inflows into ETFs surpassed $5.5 billion. Wolfe began recommending investments in ETH back in May when it started showing strength against Bitcoin.
Now the company sees signs of a broader trend reversal, while Ethereum is trading near five-month highs against BTC.
Aside from ETH, altcoins are showing signs of revival. XRP has risen 28% over the past month and now outperforms Bitcoin in year-to-date metrics. Wolfe also noted bullish technical indicators for coins like Solana, Cardano, Avalanche, and Chainlink.
"A breakout above the May highs looks quite likely," said Ginsberg, describing recent actions as a "gradual turnaround," suggesting that the altcoin space is gaining momentum. Solana, for example, is "set to return to May highs in the coming weeks."
Bitcoin, meanwhile, remains strong and is once again trading near historical highs. Wolfe does not expect a significant pullback, noting that "overbought conditions are known to persist here during recent accelerations."
Overall, the broker maintains a positive outlook on BTC and ETH but says investors should start transitioning to smaller tokens.
"With this in mind, we continue to recommend maintaining an overweight position in BTC and ETH while simultaneously beginning to increase your exposure to altcoins," the note concludes.
