Bitcoin Dominance Signals Potential Altcoin Rally Despite Recent Market Dip, Experts Say
- The altcoin market has been experiencing a sustained downtrend for the past two weeks, according to crypto experts.
- However, a significant indicator may signal that this recent decline marks a “bottom level.” If history repeats itself, we might see substantial movements in altcoins soon.
- Real Vision’s Chief Crypto Analyst Jamie Coutts noted that the index measuring the top 200 cryptocurrencies equally, the Top 200 EQW, remains in a downward trend. However, the Altseason indicator dropping to 10% might indicate a nadir in negative momentum.
Is the Altcoin Market Poised for a Rebound? Discover what leading experts say as a crucial indicator hints at potential upside.
Crucial Indicator Suggests Altcoin Market Nadir
Jamie Coutts, the Chief Crypto Analyst at Real Vision, indicates that the Top 200 EQW index, which equally weighs the top 200 cryptocurrencies, continues to show a downward trend. Despite this, the Altseason indicator, which has fallen to 10%, might be signifying a bottom in the ongoing negative momentum. Coutts shared a chart demonstrating that only 10% of the top 200 have outperformed Bitcoin (BTC) over the past 90 days. Historically, such conditions have preceded significant rallies in altcoins.
Daily Active Users Show Growth Across Blockchains
Another factor supporting Coutts’ prediction is the increase in Daily Active Users (DAU) across various blockchains. DAU tracks the number of unique addresses conducting transactions on a blockchain daily. Coutts highlights that DAU has risen by 97% year-to-date, a clear sign that growth momentum in the cryptocurrency market remains strong.
Is the Stage Set for Ethereum and Altcoins?
According to popular crypto analyst Moustache, certain altcoins are poised for their “second round.” In a recent article, Moustache argued that the launch of spot Ethereum ETFs would provide the necessary conditions for a bullish movement. Furthermore, he drew parallels to 2020, suggesting that the altcoin market capitalization is following a similar preparatory phase before its most robust surge during a bull run.
Bitcoin Dominance and Its Implications
Bitcoin dominance, an important metric measuring Bitcoin’s market share relative to the overall cryptocurrency market, is often used to gauge the onset of an altcoin rally. Currently, Bitcoin dominance stands at 54%, down from a three-year high of 56.5% reached on April 13. For a full-fledged altcoin season to be declared, 75% of the top 50 altcoins need to outperform Bitcoin over a three-month period. As of now, only 37% have managed to do so, indicating that although signs of an altcoin rally are emerging, it is still too early for a definitive call.
Conclusion
In conclusion, while recent indicators suggest that the altcoin market may be nearing a bottom, it’s essential for investors to remain cautious. The increase in Daily Active Users and the potential for Ethereum ETFs are promising signs, but Bitcoin’s current dominance highlights the ongoing uncertainty. As always, readers should conduct their own research and consider the inherent risks involved in cryptocurrency investments.
