The crypto markets are undergoing a substantial correction with a massive drop in liquidity. Some altcoins suffered pullbacks of more than 50% in less than 24 hours, causing a significant shift in market sentiment. Meanwhile, altcoin market capitalization has reached some crucial levels, leading to a massive breakout during the 2021 bull run. Therefore, even more fallout is expected, which could confirm the start of the next Alt season.
The markets have found themselves in an interesting position, with altcoins falling by a wide margin, while the price of Bitcoin has barely risen. Currently, most altcoins have filled the fuses from yesterday’s wipeout and made higher lows. It is believed that this is a good indication of where the altcoins may start to regain some lost levels. On the other hand, Bitcoin dominance has fallen below the bullish range, but efforts are underway to validate a recovery.
Will the levels succeed in sparking a strong recovery? If so, will Altseason start?
To analyze the next course of action of the altcoins, the Bitcoin dominance chart plays an important role. A drop in dominance levels usually triggers the altcoins, while a massive pullback initiates a strong altseason. Currently, levels have fallen from the rising wedge, likely resulting in a significant pullback followed by a recovery. However, the historical pattern indicates that dominance is headed for further decline.
In 2021, during the bull run, BTC dominance rose above 70%, which resembles the current rise above 60%. The levels fell from the rising wedge and consolidated along the support, which helped BTC price mark a new ATH in 2021, but also in recent times. Unfortunately, dominance continued to decline regardless of market dynamics, which are expected to repeat themselves in the coming days.
Considering the technical characteristics, the RSI has dipped below the average zone for the first time since December 2022, indicating a decline towards the lower threshold. Second, volume has reached the peak levels of the bull run, and once these calm down, dominance may start to move sideways, allowing altcoins to thrive and maintain a healthy alt season, likely in the first few weeks of 2025, which the rest could continue. of the year.