So far, the current crypto market cycle has been led primarily by Bitcoin, with only a few altcoins showing some movements and even though some analysts think alts are there for a big rally, other warn on possible altcoins correction.
That is also clearly reflected in the ETH/BTC ratio, which has been on a decline for more than 1,000 days. However, there is an emerging feeling both in the altcoin market cap and the Bitcoin dominance charts that other coins might be about to outperform.
Is Q4 going to bring about an altcoin season, or will this breakout further be delayed?
Altcoin Season Yet? 75% Confirming Indicator Explained
The altcoin season presents some of the best opportunities that investors can make from the fast growth of these small-cap tokens. Smart traders always look out for the first signs of such a rally, whereupon they dive in to leverage the promising coins for extreme returns.
Many analysts currently believe we are at the beginning of the season, a time when the vast majority of tokens show strength as Bitcoin starts to recover. However, altcoins correction might be soon coming as well. If there’s one thing historical trends have taught us, it’s that when the dominance of Bitcoin starts to fall, this is usually a very strong indication that the alts are about to make their run. But just for example, Bitcoin’s price slipped by over 3% on Monday due to panic selling of the cryptocurrency by investors ahead of a major macro week in the United States and rising tension in the Middle East. On the other hand, all top altcoins have historically showed upward trend in Q4 and were showing stronger resistance.
At the end of September, Bitcoin dominance stood at 57.39%, slipping only marginally from the week before. A decline in dominance is certainly an important signal, but veteran investors will typically want to see more confirmation. However, as for now, analysis show that Bitcoin price eyes a potential Q4 rally after a bullish September mostly because of the institutional inflows.
If there is one metric to look out for, it is when 75% of the top 50 cryptocurrencies in the market outperform Bitcoin for a period of 90 days consecutively. This often leads to great gains following the shift in markets, as many holders of BTC usually diversify some portions of their funds into other coins.
Experts Warn of Altcoins Correction Despite Recent Surge
In the latest update from Santiment, Brian Quinlivan – Director of Marketing, and CEO Maksim Balashevich reviewed some of the latest developments in the crypto space.
According to Quinlivan, after a pretty slow summer, the market has really rebounded since a low three weeks ago on September 5th. Other coins have taken turns rallying over the last three weeks and meme coins are leading the charge today.
He did, however, temper this optimism by saying that this was perhaps a sign that a near-term Altcoins correction was due.
He also pointed to a change in investor behavior, where the majority of Bitcoin holders moved into riskier and more speculative assets. That can be seen in the decreased number of Bitcoin holders and the comparative increases in assets like Ethereum, Tether, and Cardano.
This may suggest, Quinlivan said, that investors are looking at better returns in altcoins-a sign that could show the market is getting overheated. This usually indicates increasing speculation, as the trend of moving away from Bitcoin into more volatile assets is a signal that the onset of a market correction might be near.
Altcoin Explosive Growth in Q4, But Correction Coming
Kyle Chasse, CEO of PAID, shares a similar outlook. He pointed out that the total altcoin market cap (excluding ETH) typically hits a new all-time high around 287 days after Bitcoin’s halving.
He sees Q4 as the starting point for a major reversal, with the altcoin market cap currently 45% below its peak.
Chasse expects it to reach $1 trillion by the end of the year, driving several other coins to pump by 5x-10x.
However, like Quinlivan, he anticipates an altcoins correction similar to 2020’s cycle before a new all-time high is achieved, with other coins going parabolic after weaker hands are flushed out, leading to significant gains for those who stay in the game.
Teuta
Teuta is a seasoned writer and editor with over 15 years of experience in macroeconomics, technology, and the cryptocurrency and blockchain industries. Starting her career in 2005 as a lifestyle writer for Cosmopolitan in Croatia, she expanded into covering business and economy for several esteemed publications like Forbes and Bloomberg. Influenced by figures like Don Tapscott and Bruce Dickinson, Teuta embraced the blockchain revolution, believing crypto to be one of humanity’s most crucial inventions. Her fintech involvement began in 2014, focusing on crypto, blockchain, NFTs, and Web3. Known for her excellent teamwork and communication skills, Teuta holds a double MA in Political Science and Law, enjoys punk rock, chablis, and has a passion for shoes.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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