The crypto markets are undergoing a substantial correction with a massive drop in liquidity. Some altcoins faced an over 50% pullback in less than 24 hours, which caused a significant switch in market sentiment. Meanwhile, the altcoin market capitalisation has reached some crucial levels, which triggered a massive breakout during the 2021 bull run. Therefore, some more fallout is expected, which may validate the start of the next Altseason.
The markets have entered an interesting position, with the altcoins dropping by a large margin while the Bitcoin price barely rose. Currently, most of the altcoins have filled the wicks of yesterday’s wipeout and locked in higher lows. This is believed to be a good indication of where the altcoins may begin to reclaim some lost levels. On the other hand, the Bitcoin dominance dropped below the bullish range but is trying hard to validate a rebound.
Will the levels manage to set up a strong recovery? If yes, will Altseason kick off?
To analyse the next course of action of the altcoins, the Bitcoin dominance chart plays a major role. A drop in the dominance levels usually triggers the altcoins, while a huge pullback initiates a strong altseason. Presently, the levels have dropped from the rising wedge, which is believed to result in a significant pullback followed by a recovery. However, the historical pattern suggests that dominance is poised for more downfall.
Back in 2021, during the bull run, the BTC dominance surged and reached above 70%, which resembles the current rise above 60%. The levels dropped from the rising wedge and consolidated along the support, which helped the BTC price mark a new ATH in 2021 as well as in recent times. Unfortunately, the dominance kept on falling, regardless of the market dynamics, which is expected to repeat in the next few days.
Considering the technicals, the RSI has plunged below the average zone for the first time since December 2022, suggesting a drop to the lower threshold. Secondly, the volume has reached the bull run peak levels, and once they calm down, the dominance may begin to move sideways, allowing the altcoins to thrive and maintain a healthy Altseason probably in the first few weeks of 2025 that could persist for the rest of the year.
