Could altcoins make a comeback after Bitcoin‘s latest halving? Let’s examine the views of industry experts and important signals.
After Bitcoin’s (BTC) latest reduction in new supply, the cryptocurrency market has shown unpredictable behavior.
Some people expected Bitcoin’s value to significantly increase, but instead, its price has remained stable, falling short of the all-time highs reached in March 2024. During this time of expectation and readjustment, the values of alternative cryptocurrencies have suffered.
In recent times, Bitcoin has been more popular among investors compared to its counterparts, resulting in significant losses for the altcoin market. Since March, the total value of all altcoins combined has experienced a steep drop. The market cap peaked at an impressive $1.27 trillion but plunged to a low of $908 billion by April 13th.
Since that time, the market has made some progress with its value reaching approximately $1.06 trillion by April 23rd. However, the path toward stability is still filled with uncertainty.
Over the last month, numerous altcoins have faced significant difficulties. Around eight in ten of the leading 100 altcoins have experienced drops, ranging between a minimal 2% and a substantial 50%.
Just like Ethereum (ETH), the largest alternative coin based on market capitalization, hasn’t escaped the recent slump. Reaching an all-time high of $3,727 on April 8th, its value has been gradually dropping since then.
Starting from April 23rd, Ethereum can be purchased for around $3,200 on the open market, mirroring the decline in value for most alternative cryptocurrencies.
The power of Bitcoin in the market remains significant. Where might alternative coins gain ground? Let’s explore.
Are we in an altcoin season?
During optimistic economic phases, Bitcoin often takes the front row seat, drawing in the spotlight and luring mainstream interest and finance.
After Bitcoin experiences a significant price increase, it’s common to witness an “altcoin rally” or “altseason.” During this time, investors shift their attention and resources towards alternative cryptocurrencies. This trend has been noticeable in past bull markets, including those in 2017-2018 and 2020-2021, where altcoins occasionally surpassed Bitcoin’s gains.
In an altcoin boom, the proportion of Bitcoin’s market control typically lessens, making way for altcoins to amass a bigger combined influence. Yet, the present market scenario diverges from this pattern.
Where could altcoins go, and what factors could trigger it?
Based on our examination of historical data, it is observed that altcoin market surges typically begin not long after a Bitcoin halving occurs.
An essential indicator to keep an eye on for possible signs of an upcoming altcoin price surge is the Altcoin Season Index. This tool helps gauge the comparative power of altcoins versus Bitcoin.
During the latest Bitcoin halving, the Bitcoin index saw an initial drop, suggesting a potential increase in Bitcoin’s influence. However, it’s important to mention that altcoins underwent a more significant price decrease during this same period.
If the Altcoin Season Index goes beyond a particular level, usually over 75, it’s a sign that the chances of an altcoin price surge are higher.
Based on current information, the Altcoin Season Index has a reading of 39. This suggests that the altcoin market rally, which is often referred to as an “altcoin season,” might not occur soon.
The good news is, we’re not quite at the #altcoin boom stage just yet. However, instead of waiting for it to hit before acting, consider taking advantage of the current situation and positioning yourself earlier.
— Ali (@ali_charts) April 20, 2024
Tether (USDT) Market Share is another significant metric, representing the proportion of the cryptocurrency market that USDT occupies in comparison to other digital currencies.
A decrease in USDT’s market prominence may indicate that investors are growing more courageous and swapping stablecoins for cryptocurrencies, which could mark the start of an altcoin price surge. The current analysis of the USDT dominance graph suggests that new low points correspond with early signs of altcoin market upswings.
In simpler terms, if the usage of USDT (Tether’s stablecoin) increases relative to other cryptocurrencies (altcoins), it suggests that investors are favoring stablecoins over altcoins. This could mean a delay in the return of the “altcoin season,” where altcoins experience significant price growth.
Considering the importance of timing as well, altcoin surges tend to happen in alignment with particular market situations. For instance, these events may transpire a few weeks or even months following Bitcoin’s halving processes.
The extra wait time could be explained by the need for investors in the Bitcoin market to first understand and then adjust their portfolios in response to the event of Bitcoin’s halving.
To determine if altcoins are gaining momentum, keep an eye on a rise in trading activity along with consistent price growth among several altcoins.
What do experts think?
The experienced cryptocurrency analyst, referred to as the Emperor, notices that prior to the halving event, Bitcoin’s market dominance had been increasing and was approaching the high point of resistance it had reached following the post-halving price decline in 2020.
Around May, the Emperor expects a significant surge in the prices of altcoins, possibly fueled by Bitcoin’s continued strength and stability.
The Emperor proposes a hypothetical situation in which Bitcoin could potentially regain its value to approximately $68,000 or even surpass its previous record, enticing major investors to sell for substantial gains.
In the meantime, some alternative cryptocurrencies, notably those that have performed well lately, might witness price surges.
Michael van de Poppe, a well-known cryptocurrency analyst, shares the opinion that after the halving event, there is a growing trend among investors towards altcoins.
#Bitcoin halving has finished and the markets are going up again.
Bitcoin dominance goes back down, which means that the rotation has slowly started.
— Michaël van de Poppe (@CryptoMichNL) April 22, 2024
As Bitcoin’s influence wanes, suggesting a shift in the market, it looks like the opportunity for altcoins approaches.
Michael proposed that Ethereum (ETH) might assume a more significant role as a settlement layer in the cryptocurrency market, potentially influencing the behavior of alternative coins in the upcoming months.
The time for #Altcoins is on the horizon.
It depends on Ethereum, which is currently becoming a stronger settlement layer.
The likelihood of an ETF is low, but the answer is coming in a month.
I’m positioning long on this.
— Michaël van de Poppe (@CryptoMichNL) April 22, 2024
In light of this, it’s important to regularly review significant metrics like Bitcoin’s market share and pay attention to altcoins. Adhering to the fundamental principle of investing, be cautious not to risk more capital than you’re prepared to potentially lose.
Read More
Sorry. No data so far.
2024-04-23 16:19