Cardano (ADA), Solana (SOL) and Polkadot (DOT) soar — Is it altseason?
Bitcoin (BTC) faced a sharp correction on Dec. 11 plummeting as much as 8% to a four-month low at $40,150, wiping out the gains of the past seven days.
This drop in BTC’s price has triggered a market-wide re-evaluation, prompting a debate on the potential for altcoins to spearhead the next significant rally in the cryptocurrency landscape.
Market experts and analysts believe the recent price crash is a part of the ongoing price cycle, and after two months of a bullish surge, a correction was inevitable.
Analysts’ insights into Bitcoin’s recent pull-back
Crypto analyst and co-founder of Reflexivity Research Will Clemente interpreted the market correction as a means to shake out weak positions and reduce the highly leveraged crypto markets, attributing this volatility to a necessary phase in market evolution.
BTC just ~doubled in 2 months with no pull backs, a correction is not that surprising.
Corrections shake out “weak hands” and leverage, allowing for a stronger foundation for eventual moves higher.
Bitcoin’s volatility is a feature, not a bug.
Chill with the leverage https://t.co/BdvvS8KDZU
— Will (@WClementeIII) December 11, 2023
Additionally, Kaleo, co-founder of the LedgArt NFT project, took to X to express their belief that the recent downturn was “nothing more than a healthy correction after a massive parabolic extension.”
According to Kaleo, the flagship cryptocurrency has defined a “new range” within which it is likely to consolidate for the next couple of months before scaling higher.
#Bitcoin / $BTC
As I discussed in yesterday’s stream, the recent dip we had was nothing more than a healthy correction after a massive parabolic extension.
I believe we’ve defined the upper and lower bounds of a new range that we’ll likely trade within for the next month or two… pic.twitter.com/JOizKeJq3Q
— K A L E O (@CryptoKaleo) December 13, 2023
A Dec. 12 post from X social platform user Bankless pointed out that while the crypto market experienced the “worst day” in months on Dec. 11, the pull-back presented a “chance to buy the dip”.
Crypto markets had the worst day in months!
$TOTAL defending $1.5T$BTC down 7.3%$ETH down 7.5%
Is this pullback a chance to buy the dip?
Find out https://t.co/v5cYZ3OzH6 pic.twitter.com/JRrDJ0qyE7
— Bankless (@BanklessHQ) December 11, 2023
Market intelligence firm Santiment pointed out a significant surge in social media posts advocating for ‘buying the dip.’
“#Crypto has experienced its fastest drop in 4 months as markets have corrected and caused mild trader concerns. There is a high level of #buythedip calls, which typically means that there is a bit of overeagerness and #FOMO on these low prices. ”
Bitcoin might have pulled up from the multi-month lows, but the big winners right now are altcoins, as many cryptocurrencies have outperformed BTC during the last week.
Altcoins have rallied on nearly every timeframe
Altcoins have demonstrated great returns over the last seven days, outperforming Bitcoin. Some of them have displayed better performance on longer timeframes.
According to data from CoinMarketCap, Bitcoin has dropped 1% over the last seven days while Cardano (ADA) has gained 49%. Avalanche (AVAX), Polkadot (DOT), Solana (SOL), and Binance Coin (BNB) have also outperformed Bitcoin during the last week.
More importantly, while the pioneer cryptocurrency has rallied approximately 60% over the last 90 days to tag $44,000, many altcoins have outperformed Bitcoin over the same period. AVAX has particularly competed fiercely with BTC, almost tripling over the last three months. SOL and ADA have rallied 267% and 150% respectively.
On the shorter timeframe, Cardano is leading the gains among the largest cryptocurrencies by market capitalization after rising 12% over the last 24 hours. The other top layer 1 token Solana comes in second with 10% on the gains on the day, while Polkadot’s DOT has increased by 9.2% over the same period.
Meanwhile, despite reclaiming the key $42,000 level, Bitcoin posted only 3% gains on Dec. 13, suggesting that it is still trailing the altcoins. But can we really speak about the start of another altcoin season?
Related: Price analysis 12/13: BTC, ETH, BNB, XRP, SOL, ADA, DOGE, AVAX, DOT, MATIC
Has altcoin season arrived?
Crypto trader Remen wrote in an X (formerly Twitter) post that he believes the recent dump could push altcoins into another bull run. He added that it would take a long period of chops for the big crypto to resume an uptrend, as BTC dominance has topped out.
I told you about flash dumps repeatedly
Now dump is completed
It will take a long period of chops for Bitcoin to resume uptrend
Bitcoin dominance topped
We now entering proper ALT SEASON
BE POSITIONED
Tears of regret don’t taste great
— RamenPanda (@IamRamenPanda) December 11, 2023
Even though some signs are there, it may still be too early to confirm the altcoin season. Altcoins are digital assets other than Bitcoin and the crypto community recognizes an altcoin season when the majority (at least 75%) of the top 50 coins by market cap outperform Bitcoin for 90 days. This has only been seen for a few altcoins, and it remains to be seen if more will follow suit.
According to Data from Blockchain Center, only 53% of the top altcoins have outperformed BTC during the last three-month period. Although this is a positive sign, it is still not enough to declare an altcoin season.
In addition, Bitcoin’s market cap dominance is still above 50% since crossing this level on Oct. 1, reaching a high of 55.26% on Oct. 6, the highest in over two and a half years.
Bitcoin dominance fell to 52% on Dec.11 and as the price continued to dump, the crypto community began chanting the start of “altcoin season.” At the time of writing, BTC dominance is back to around 53.06%, just above its 50-day exponential moving average (EMA).
However, it remains to be seen if the oldest crypto will hold its position or if altcoins will continue rallying, with the shorter-term view showing that crypto markets could remain range-bound.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
