Author: Ciaran Lyons, CoinTelegraph; Translated by: Deng Tong, Golden Finance
Until Bitcoin confirms a breakout above the $100,000 mark, altcoins will continue to fluctuate between sharp gains and pullbacks, according to a cryptocurrency analyst.
“We’re really looking forward to seeing this strong move and then we’ll look at the rotation of capital,” Pav Hundal, chief analyst at cryptocurrency exchange Swyftx, said at Aus Crypto Con 2024.
Altcoins will “remain volatile”
Hundal said that while there are some “diamonds in the rough” that outperform Bitcoin, most altcoins, like several meme coins, will likely “remain volatile” until Bitcoin breaks through the six-figure price level. Previously, Bitcoin narrowly missed $100,000, reaching $99,605. At press time, it is trading at $96,476.
As of the time of publishing, Bitcoin is trading at $96,476. Source: TradingView
“I mean, they might see a 20, 30, 40% move, and then the next day they’ll give back most of that move,” Hundal said.
On November 21, Solana gained 12.98% in 24 hours, but then fell nearly 13% over the next five days.
Even the major meme coins by market cap saw this pattern. On Nov. 15, Pepe surged about 93.15% in just 24 hours after Coinbase and Robinhood announced their listings, but gave up nearly 22% of its gains the next day, according to CoinMarketCap.
When asked if PEPE has the potential to achieve “800% daily gains” like DOGE did in the last cycle, Hundal said he “wouldn’t discount that, but when you’re talking about high market caps, you do need inflows.”
“When Bitcoin dominance starts to trend back down, this type of thing becomes more likely.”
Bitcoin dominance measures Bitcoin’s market capitalization as a percentage of the entire cryptocurrency market.
Bitcoin dominance is key
Hundal believes that Bitcoin’s dominance could reach “65% to 67%” or even “70%” before starting to decline.
“For me, this isn’t about trying to pick a PICO for Bitcoin dominance to tell when the altcoin market starts to fall,” Hundal said.
At press time, Bitcoin’s dominance is 58.30%, according to data from TradingView.
As of the time of publishing, Bitcoin’s dominance is 58.30%. Source: TradingView
“Bitcoin dominance will drop dramatically starting next month,” anonymous crypto trader Mikybull Crypto said in a Nov. 28 post.
However, CryptoQuant CEO Ki Young Ju recently warned his 374,200 X followers not to expect the altcoin season to be like previous cycles.
Ju said this is due to institutional investors driving the current Bitcoin rally, who have shown little interest in more speculative tokens.
“Unlike cryptocurrency exchange users, institutional investors and ETF buyers have no intention of shifting assets from Bitcoin to altcoins,” Ju said.
"In order for altcoins to reach new all-time highs in market cap, they will require a significant influx of new capital into crypto exchanges. Altcoin market caps below previous ATHs indicate less fresh liquidity from new exchange users," he added.
