Is the next big price explosion in altcoins about to begin?
The analysis of the recent drops in altcoin prices and their recovery prospects shows mixed signals, although with some optimism for the coming weeks.
- Bitcoin's dominance has affected altcoins, as investors focus on more established assets. However, this dominance is slightly decreasing, which could favor a more dynamic market for altcoins. For example, the total market capitalization of altcoins (excluding Bitcoin and Ethereum) has shown signs of recovery, with a 19% increase since September, although it still faces key resistances.
- Some technical indicators, such as the stochastic RSI, have produced bullish signals pointing to a possible significant rebound. However, the lack of superior performance compared to Bitcoin in at least 75% of the major altcoins indicates that we are not yet in a full "altseason." Currently, only 39% of altcoins have outperformed Bitcoin in returns over the past 90 days.
- Altcoins like Ethereum, Arbitrum, and Chainlink are positioning themselves as key assets due to technical and market developments, such as the implementation of layer 2 solutions and their role in DeFi. Additionally, assets like Thorchain (RUNE) and dYdX have potential as decentralized services grow.
- If the current trend of recovery in the total market capitalization of altcoins continues and technical indicators remain aligned, we could observe a moderate bullish movement in the coming weeks. However, the market remains sensitive to external factors, such as global monetary policies and the adoption of new regulations.
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