While some analysts anticipate a significant altcoin rally, others warn of a possible correction.
DeUp until now, Bitcoin has led the current cryptocurrency market cycle. Only a few alternative currencies have seen any movement, and while some analysts believe that alternative cryptocurrencies are poised for a significant rally, others warn that there may be a correction in the altcoin market.
The ratio of ETH to BTC, which has been declining for more than a thousand days throughout this time period, clearly reflects this. However, a growing sentiment, evident in both the altcoin market cap and the Bitcoin dominance charts, suggests that other coins could potentially outperform Bitcoin in the near future.
At this moment, a large number of analysts believe we are at the beginning of the season, which is a period in which the vast majority of tokens demonstrate strength as Bitcoin begins to recover.
However, it is possible that a correction in altcoins will occur in the near future. If we’ve learned anything from historical patterns, it’s that a decrease in Bitcoin’s dominance typically signals the impending rise of alternative cryptocurrencies.
As an illustration, the price of Bitcoin dropped by more than three percent on Monday due to speculators selling the cryptocurrency in a panic ahead of a significant macroeconomic week in the United States and escalating tensions in the Middle East.
However, all of the main alternative cryptocurrencies have traditionally demonstrated an upward trend in the fourth quarter and exhibited stronger resistance. The percentage of Bitcoin that was in circulation at the end of September was 57.39%, representing a little decrease from the previous week.
A loss in dominance is unquestionably a significant indicator; nevertheless, experienced investors would often want to see additional confirmation before making any decisions.
For the time being, however, data indicates that the price of Bitcoin is anticipating a possible rally in the fourth quarter following a strong September, primarily due to institutional investors’ inflows.
One statistic to watch is when 75 percent of the top 50 cryptocurrencies on the market outperform Bitcoin for a consecutive period of ninety days. Many people who own Bitcoin typically diversify some of their holdings into other coins, which frequently results in significant gains following a move in the cryptocurrency markets.
In the most recent update that Santiment released, Maksim Balashevich, CEO of Santiment, and Brian Quinlivan, Director of Marketing, discussed some of the most recent changes in the cryptocurrency industry.
Quinlivan asserts that the market has made a significant recovery since reaching a low point on September 5th, three weeks ago, following a summer that was very unremarkable. Over the course of the past three weeks, several coins have taken turns rallying, but meme coins are currently leading the charge among those coins.
He did, however, temper this optimism by stating that this could potentially signal a near-term correction for altcoins.He also mentioned a change in investor behavior.
According to him, the bulk of Bitcoin holders have moved their holdings into assets that are riskier and more speculative. It is possible to observe this phenomenon by observing the decline in the number of Bitcoin holders and the relative rise in the value of assets like Ethereum, Tether and Cardano.
Quinlivan suggests that investors may be seeking higher returns in alternative cryptocurrencies, a sign that the market is heating up. This is typically an indication of an increase in speculation, since the trend of shifting away from Bitcoin and toward assets with a higher degree of volatility is a hint that the beginning of a market correction may be close at hand.
PAID’s Chief Executive Officer, Kyle Chasse, has a similar point of view. We brought to his attention that the overall market capitalization of altcoins, excluding Ethereum, regularly reaches an all-time high approximately 287 days after half of Bitcoin’s supply.
Given that the total market capitalization of alternative cryptocurrencies is currently 45% lower than its all-time high, he believes that the fourth quarter will mark the beginning of a significant reversal.
By the end of the year, Chasse anticipates that it will reach one trillion dollars, which will cause a number of other coins to pump by five to ten times.
On the other hand, he shares Quinlivan’s expectation that altcoins will undergo a correction similar to the 2020 cycle before reaching a new peak. When weaker hands are flushed out, other currencies will go parabolic, resulting in big returns for those who continue to participate in the game.
