The cryptocurrency market is showing signs of recovery after a significant correction in February, with altcoins leading the charge. The total crypto market cap has bounced off the $3 trillion mark, and the altcoin market cap, despite facing rejection at $425 billion, is exhibiting a shallower pullback compared to previous downturns.
Crypto analyst Rekt Capital’s technical analysis highlights the importance of the $425 billion resistance level for the altcoin market. The current pullback measures around 50% from this level, whereas the last two significant downturns saw steeper declines of 69% and 85%. This milder retracement indicates that bearish momentum is weakening, and the market is showing growing resilience.
The relatively shallow pullback from the $425 billion resistance level strengthens the argument that the anticipated altcoin season could unfold better than in the past two cycles. Crypto analysts are eagerly awaiting an altcoin season, where profits from Bitcoin start flowing into altcoins, and the altcoin market outperforms Bitcoin.
However, Bitcoin dominance remains strong, and a full-fledged altcoin season has yet to materialize. Rekt Capital noted a recent rejection of Bitcoin dominance around 64%, but history suggests that the real rejection occurs around 71%. If Bitcoin dominance reaches this level and faces a harsh rejection, it could signal the start of a cycle-defining altcoin season.
For now, analysts suggest that the anticipated altcoin rally may be on pause, with Bitcoin continuing to absorb the majority of market liquidity. Altcoin investors may have to wait a little longer for a clearer reversal in Bitcoin dominance before the altcoin market can truly take off.
The current market conditions present an opportunity for investors to prepare for the potential altcoin season. As the market recovers and Bitcoin dominance shows signs of weakening, allocating a portion of one’s portfolio to promising altcoin projects could prove to be a profitable strategy.
Trade Altcoins on Defx
Take advantage of the potential altcoin season by trading on Defx, the leading decentralized exchange. With support for multi-collateral and funding from Solana, Arbitrum, and Berachain, Defx offers a seamless trading experience.
As always, it is essential to conduct thorough research and exercise caution when investing in cryptocurrencies. The market can be volatile, and past performance does not guarantee future results.
Tags: altcoins, altcoin season, crypto market, bitcoin dominance, technical analysis