The cryptocurrency market has experienced some striking patterns in 2021, and now it seems to be re-emerging. Specifically, the market has seen significant volatility, especially between September and November, which can provide insight into current trends.
September 2021: Bloody September
The cryptocurrency market saw a notable correction in September 2021. For example, Bitcoin ($BTC) fell from about $52,000 at the beginning of the month to about $40,700 at the end of the month, a drop of about 22%. The decline was largely attributed to increased regulatory scrutiny, especially China’s crackdown on cryptocurrency activities, which spooked investors.
November 2021: Altcoin Season and Recovery
However, after a turbulent September, the market has seen a strong recovery. By November, Bitcoin had risen to an all-time high of around $69,000. Altcoins also experienced significant growth during this period. For example:
- Ethereum $ETH surged 60% from around $3,000 in September to over $4,800 in mid-November.
- Solana ($SOL) jumped from around $140 in early September to an all-time high of around $260 in November, an increase of 85%.
The recovery came with a significant shift in market dynamics. Bitcoin’s dominance was around 47% in early September and fell to around 41% in November, marking a strong growth season for altcoins, with capital flowing from Bitcoin into alternative cryptocurrencies.
The role of dominance
Bitcoin’s market dominance is an important indicator of overall market sentiment. In 2021, a sharp drop in dominance was followed by a massive influx of funds into altcoins, driving their gains. A similar pattern may play out this time: a sharp drop in Bitcoin’s dominance could trigger a new altcoin season, potentially leading to a sharp rise in altcoins.
Potential scenarios for 2024
Given these similarities, if we see this pattern repeat itself in 2024, we would likely first experience a sharp decline, perhaps seeing Bitcoin pull back after hitting key resistance levels such as $55,000. If Bitcoin dominance then declines, this could set the stage for another altcoin rally similar to November 2021, where we could see Bitcoin move towards $66,000, with altcoins following suit, sparking widespread market optimism.
I'm noticing more and more similarities to the patterns and indicators I'm seeing in 2021! We discuss several factors that could exacerbate the typical September downturn, potentially setting the stage for November’s altcoin season, which will be fueled by massive capital inflows. However, it's hard to imagine this happening without a significant decline in dominance.
From what I have observed, this decline could be sudden, followed by a full recovery within a month. Of course, it would be ideal if we broke $55,000 and quickly headed for $66,000, triggering general growth and satisfaction across the market.
This analysis highlights the importance of monitoring market dominance and historical patterns as they can provide valuable insights into potential market moves. #美联储何时降息？ #MtGox钱包动态 #美国CPI数据连续第4个月回落
