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Can altcoins rebound? Analyzing expert predictions and key indicators following Bitcoins recent halving.

In the wake of Bitcoins (BTC) recent halving event, the crypto market has been anything but predictable.

While many anticipated a surge in Bitcoins value, the reality has been a bit more subdued. In fact, the market remains relatively flat, lingering below the record-breaking highs witnessed in March 2024. Throughout this period of anticipation and adjustment, altcoins have taken a hit.

Investors seemed to have favored Bitcoin over its alternatives, causing a noticeable bleed in the altcoin market. Since March, the combined market cap of altcoins has seen a sharp decline, plummeting from a peak of $1.27 trillion to a low of $908 billion by Apr. 13.

Although there has been a modest recovery since then, with the market cap climbing back to around $1.06 trillion as of Apr. 23, the road to stability remains uncertain.

The past month has been particularly challenging for many altcoins. Approximately 80% of the top 100 altcoins have witnessed declines ranging from 2% to as much as 50%.

Even Ethereum (ETH), the leading altcoin by market cap, has not been immune to this downturn. Despite reaching a high of $3,727 on Apr. 8, its value has steadily declined in the days that followed.

As of Apr. 23, Ethereum is trading at approximately $3,200, reflecting the downward trend in the altcoin market.

With Bitcoins dominance remaining strong, where could altcoins potentially find their footing in the market? Lets find out.

In bullish market cycles, Bitcoin typically leads the charge, attracting mainstream attention and investment.

Following Bitcoins surge, a phenomenon known as the altcoin season often occurs, where capital flows into altcoins. This pattern has been observed in previous bull markets, such as those in 2017-2018 and 2020-2021, where altcoins sometimes outperformed Bitcoin.

During an altcoin season, Bitcoins dominance in the market tends to decrease as altcoins collectively gain a larger share. However, the current market situation does not reflect this trend.

Analyzing data from past cycles, we find that altcoin seasons historically commence shortly after the Bitcoin halving event.

One crucial metric to monitor for signs of an impending altcoin rally is the Altcoin Season Index. This index provides insights into the relative strength of altcoins compared to Bitcoin.

While the recent Bitcoin halving event initially caused the index to dip, indicating a period of Bitcoin dominance, its essential to note that altcoins experienced a steeper decline in value during this time.

When the Altcoin Season Index surpasses a certain threshold, typically above 75, it suggests an increased probability of an altcoin rally.

As of the latest data, the Altcoin Season Index stands at 39, indicating that an altcoin season may still be some time away.

Fortunately, it isnt #altcoin season yet, so there is still plenty of time to prepare.

But you cannot wait for the #altcoin season to begin before you start positioning yourself. Its better to get in early than late! pic.twitter.com/MtGGgk1V3D

Another critical indicator is Tether (USDT) Dominance, which tracks the market share of the USDT stablecoin compared to other cryptocurrencies.

A downward trend in USDT dominance suggests that investors are increasingly willing to take on risk by exchanging stablecoins for crypto assets, potentially signaling the beginning of an altcoin season. The current analysis of the USDT dominance chart shows that making new lower lows correlates with the early signs of altcoin rallies.

Conversely, a change towards an upward trend in USDT dominance would indicate a preference for stablecoins over altcoins, potentially delaying the onset of an altcoin season.

Timing is also crucial to consider. While altcoin rallies can occur at any time, they often coincide with specific market conditions, such as several weeks or months after Bitcoins halving events.

This delay can be attributed to the time it takes for market participants to digest the implications of Bitcoins halving and reallocate their investments accordingly.

To gauge whether altcoins are picking up pace, you should pay close attention to an increase in trading volume accompanied by sustained price appreciation across multiple altcoins.

Emperor, a seasoned crypto analyst, observes that pre-halving Bitcoin dominance was on the rise, nearing its peak support level established after the post-halving dump in 2020.

Pre-Halving BTC Dominance Pump Almost Completed.

1. Increased EXACTLY till the last support level created after post-halving dump in 2020.

2. Most altcoins already outperforming BTC. We might have a major alt rally while approaching May if BTC remains stable.

This aligns with… pic.twitter.com/msLYk8H4Dg

— Emperor? (@EmperorBTC) April 20, 2024

As we approach May, Emperor anticipates a potential major rally in altcoins, especially if Bitcoin maintains stability.

Emperor suggests a speculative scenario where Bitcoin may recover to around $68,000 or even reach its all-time high, attracting top buyers looking to exit at profitable levels.

Meanwhile, altcoins, particularly those that have shown strength in recent months, may experience rallies.

Michal van de Poppe, another respected crypto analyst, echoes the sentiment that the post-halving market sentiments are shifting towards altcoins.

He notes that as Bitcoin dominance decreases, indicating a rotation in the market, the time for altcoins is on the horizon.

Michal also suggested the role of Ethereum (ETH), which is evolving into a stronger settlement layer within the crypto ecosystem that could impact altcoin performance in the coming months.

The time for #Altcoins is on the horizon.

It depends on Ethereum, which is currently becoming a stronger settlement layer.

The likelihood of an ETF is low, but the answer is coming in a month.

I'm positioning long on this.

Hence, you should closely monitor key indicators, such as Bitcoin dominance, and keep a check on altcoins to make informed decisions about your crypto portfolios. Always remember the golden rule of investing: never invest more than you can afford to lose.

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Altcoin season approaching? Insights from experts amid Bitcoin's halving aftermath - crypto.news