Can Alternative Coins Rebound? Assessing Expert Predictions and Key Indicators Following Bitcoin’s Recent Halving
In the aftermath of Bitcoin’s latest halving event, the crypto market has been shrouded in uncertainty. Despite expectations of a surge in Bitcoin’s value, the reality has been more subdued, with the market remaining stagnant, falling short of the record-breaking highs seen in March 2024. During this period of anticipation and adjustment, alternative coins (altcoins) have faced challenges.
Investors have shown a preference for Bitcoin over other options, resulting in a noticeable decline in the altcoin market. Since March, the total market cap of altcoins has plummeted from a peak of $1.27 trillion to a low of $908 billion by Apr. 13.
Although there has been a slight recovery since then, with the market cap rising to around $1.06 trillion as of Apr. 23, the path to stability is uncertain. The past month has been particularly tough for many altcoins, with around 80% of the top 100 altcoins experiencing declines ranging from 2% to 50%.
Even Ethereum (ETH), the leading altcoin by market cap, has not been immune to the downturn. Despite reaching a high of $3,727 on Apr. 8, its value has steadily decreased. As of Apr. 23, Ethereum is trading at approximately $3,200, reflecting the downward trend in the altcoin market.
With Bitcoin’s dominance holding strong, where could altcoins potentially find a foothold in the market? Let’s explore.
Is it Altcoin Season?
In bullish market cycles, Bitcoin usually takes the lead, attracting mainstream attention and investments. Following a surge in Bitcoin, an “altcoin season” often follows, where capital flows into altcoins. This trend has been observed in previous bull markets, such as those in 2017-2018 and 2020-2021, where altcoins sometimes outperformed Bitcoin.
During an altcoin season, Bitcoin’s dominance decreases as altcoins collectively gain a larger share of the market. However, the current market situation does not reflect this pattern.
Where are altcoins headed, and what could trigger a change?
Analyzing data from past cycles, we see that altcoin seasons typically begin shortly after a Bitcoin halving event. One crucial metric to watch for signs of an upcoming altcoin rally is the Altcoin Season Index, which compares the strength of altcoins to Bitcoin.
The Altcoin Season Index currently stands at 39, indicating that an altcoin season may be some time away. Another key indicator is Tether (USDT) Dominance, which tracks the market share of the USDT stablecoin. A downward trend in USDT dominance could signal the start of an altcoin season.
Timing is crucial, as altcoin rallies often coincide with specific market conditions, such as weeks or months after Bitcoin’s halving events. Pay attention to an increase in trading volume and sustained price appreciation across multiple altcoins to gauge if altcoins are gaining momentum.
What do the experts say?
Emperor, a seasoned crypto analyst, believes that a major altcoin rally may be on the horizon, especially if Bitcoin remains stable. Michaël van de Poppe, another respected analyst, suggests that market sentiments are shifting towards altcoins as Bitcoin dominance decreases.
Keep an eye on key indicators like Bitcoin dominance and monitor altcoins to make informed decisions about your crypto investments. Remember, never invest more than you can afford to lose.