As the crypto market anticipates the aftermath of Bitcoin's fourth halving, a notable change in market dynamics has been observed that could set the stage for an altcoin rally, also known as altseason. Crypto analyst “Michael Van de Poppe” provided insight into the changing pattern of Bitcoin’s dominance and its impact on altcoins.
Analyzing the strength of altcoins
Van de Poppe began by expressing his expectations for the strength of altcoins to match the shift in Bitcoin's dominance, hinting at the possibility of capital rotation away from Bitcoin and into alternative cryptocurrencies.
Van de Poppe emphasized the importance of monitoring Bitcoin's dominance as a leading indicator of market sentiment and potential opportunities for altcoins. Currently, Bitcoin's dominance has reached 50%, making it an opportunity to buy altcoins.
The analyst notes that the rising wedge pattern in Bitcoin dominance has historically signaled the altcoin's potential strength during a downside break. A break in this pattern could pave the way for a significant rally in altcoins, indicating a possible change in market dynamics.
Van de Poppe said that altcoins have lost 6 percent of their value compared to Bitcoin in the past three months, even if Bitcoin's price has remained unchanged in US dollar terms. He sees this as a huge opportunity for investors. Despite the recent correction, analysts believe that economic downturns often mark a major entry point for altcoin investments.
Pay attention to entry and exit points
Additionally, the analyst further discussed the concept of market rotation, highlighting how funds flow between different segments of the crypto market based on changing investor preferences and market conditions. By observing BTC pairs and analyzing altcoin price trends, traders can identify potential entry and exit points and take advantage of market movements effectively.
He concluded by suggesting that you increase compounding returns by carefully shifting your investments between altcoins whose prices have already risen significantly and those whose prices are poised to rise further. He advises investors to focus on coins with large movements and strategically consider rotating profits.
Is altcoin season approaching?
Despite Van de Poppe being bullish about the altcoin season. Altcoin Season Index spiked above 75 at the beginning of 2024, but only dropped to 25 after the halving event, indicating focus on Bitcoin, and Altcoin Season is here again. The possibility of this being done is being questioned. However, despite Bitcoin's dominance, altcoins have suffered heavy losses recently due to fears of selling pressure. The index currently sits at 39, suggesting that altcoin season is not imminent.
Also check out: Altseason is here! Watch out for 2 altcoins that will explode soon
