Bitcoin Price Drop Spurs Market Revaluation and Potential Altcoin Rally
Summary:
On Dec. 11, Bitcoin (BTC) experienced an 8% price drop, initiating a market-wide evaluation and conversation about the potential for altcoins to lead the next big rally in the cryptocurrency landscape. Experts view the drop as part of the ongoing price cycle. Crypto traders have encouraged 'buy the dip' strategies, leading to significant altcoin gains. Bitcoin's market cap dominance remains over 50%, but as it fell to 52% on Dec. 11, speculation started on the "altcoin season". Whether Bitcoin will maintain its position or altcoins will continue their rally remains uncertain.
Bitcoin (BTC) underwent a severe price slump on Dec. 11, experiencing an 8% fall and hitting a four-month low of $40,150, thus erasing the progress made over the previous week. This dip in BTC’s value has pushed the entire market to reassess its stance, instigating a discussion on the prospect of altcoins launching the next major surge in the crypto space. Trading professionals and commentators maintain the belief that the recent crash is part of the prevailing pricing cycle, and that a price alteration was foreseen following two months of bull market.
Cryptocurrency researcher and Reflexivity Research co-founder, Will Clemente, sees the market fluctuation as a purging of frail market positions and an attempt to deflate the heavily leveraged crypto marketplace, terming this unpredictability as a crucial phase of market progression. On another note, LedgArt NFT project co-founder, Kaleo, communicated his belief via social media that the recent downturn was just a standard correction following an enormous parabolic rise. He stated that the premier cryptocurrency has carved out a new trading range, which might be maintained for a few months before a subsequent climb.
A user on social media named Bankless mentioned that, as turbulent as the crypto market has been recently, the pullback provides an opportunity to "buy the dip". Market research company Santiment noted a considerable rise in social media posts encouraging this "buy the dip" strategy. Altcoins are currently topping the chart despite the fact that Bitcoin is slightly recovering, as numerous digital coins have outperformed Bitcoin in the past week. Altcoins are expected to continue yielding decent returns over a more extended period. Some altcoins have managed to outperform Bitcoin on a longer timeframe.
In terms of performance over a three-month span, Bitcoin climbed about 60% to reach $44,000; during the same period, several altcoins outperformed Bitcoin. For example, AVAX nearly tripled, while SOL and ADA rose by 267% and 150% respectively. In a shorter timeframe, Cardano leads the pack among major cryptocurrencies by market capitalisation, soaring 12% in the past 24 hours. Other leading layer 1 tokens like Solana and Polkadot's DOT also noticed growth of 10% and 9.2% respectively in the same timeframe.
Cryptocurrency trader Remen expressed his belief that the latest market crash could trigger another bullish run for altcoins, and that Bitcoin dominance seems to have reached a peak. However, it might just be premature to validate the onset of altcoin season. Altcoins are the digital currencies excluding Bitcoin and typically, an altcoin season is recognised when over 75% of the top 50 coins (by market capital) outperform Bitcoin for 90 days. So far, only a few altcoins have demonstrated this.
Based on data from Blockchain Center, only 53% of top altcoins have outperformed Bitcoin over the last quarter. Even though it's a promising sign, it's still insufficient to declare an altcoin season. Plus, Bitcoin's market cap dominance still remains over 50% since Oct. 1. However, as the price began plummeting on Dec.11, crypto aficionados started proclaiming the onset of "altcoin season". At the moment, Bitcoin’s domination has risen back to approximately 53.06%. Whether Bitcoin will retain its dominance or altcoins will proceed with their rallying is still uncertain, although the short-term prediction suggests that the crypto market could continue to oscillate.
Published At
12/14/2023 10:18:31 PM
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