As the cryptocurrency market begins to recover from February’s dramatic correction, altcoins are starting to show promising signs of strength. This renewed energy has been pushing up the total crypto market cap after it touched the $3 trillion mark on February 2nd.
During this correction, the market cap for altcoins took a significant hit, dropping considerably after hitting a stumbling block at $425 billion. However, crypto analyst Rekt Capital points out a key detail: although there was a pullback from this major resistance level, it isn’t as deep as previous downturns. This observation suggests that altcoins might be slowly gaining momentum among investors.
Despite challenges, altcoins appear to be on the rise after facing resistance at the $425 billion mark. Rekt Capital’s technical analysis highlights how crucial this level is, particularly for altcoins outside the top ten. The analysis emerges amidst a wider slump in the altcoin market, extending from a broader decline that started in January when the market cap reached nearly $440 billion, its peak in years.
Even though the market struggled at this significant level, the current decline of about 50% from $425 billion is much less severe compared to previous corrections of 69% and 85%. Such a milder drawdown implies a potential change in the altcoin market’s path forward.
The significant takeaway from this trend is that resistance at the $425 billion mark seems to be weakening, suggesting that bearish forces aren’t as intense as they’ve been in past cycles. This time around, the market is exhibiting a degree of resilience, with less frenetic selling than before.
For investors eagerly awaiting an altcoin season, Rekt Capital’s insights offer some optimism. The relatively shallow dip from the $425 billion resistance strengthens the belief that this altcoin season could fare better compared to the last two cycles.
Investors, including Rekt Capital, are anticipating an exciting shift where Bitcoin’s profits may pivot towards altcoins, potentially causing altcoins to outperform Bitcoin. In another note, Rekt Capital observed Bitcoin’s dominance was rejected around 64%. Although he indicated that historically, more significant rejections occur at approximately 71%. Should Bitcoin dominance climb to this level, a pronounced altcoin season could very well be on the horizon.
In the meantime, Bitcoin maintains strong dominance, and the expected altcoin rally is yet to fully take off. Analysts like Benjamin Cowen advise that this anticipated boom from altcoins may still be a ways off, with Bitcoin consuming the bulk of the market’s liquidity. Until Bitcoin’s dominance sees a more definitive change, investors in altcoins might have to be patient for a bit longer.
Image courtesy of Pexels, and chart by TradingView.
