November 23, 2024

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Cardano (ADA), Solana (SOL) and Polkadot (DOT) soar — Is it altseason?

3 min read
11 months ago admin
Cardano (ADA), Solana (SOL) and Polkadot (DOT) soar — Is it altseason?

Bitcoin (BTC) faced a sharp correction on Dec. 11 plummeting as much as 8% to a four-month low at $40,150, wiping out the gains of the past seven days. 

This drop in BTC’s price has triggered a market-wide re-evaluation, prompting a debate on the potential for altcoins to spearhead the next significant rally in the cryptocurrency landscape.

Market experts and analysts believe the recent price crash is a part of the ongoing price cycle, and after two months of a bullish surge, a correction was inevitable.

Analysts’ insights into Bitcoin’s recent pull-back

Crypto analyst and co-founder of Reflexivity Research Will Clemente interpreted the market correction as a means to shake out weak positions and reduce the highly leveraged crypto markets, attributing this volatility to a necessary phase in market evolution.

Additionally, Kaleo, co-founder of the LedgArt NFT project, took to X to express their belief that the recent downturn was “nothing more than a healthy correction after a massive parabolic extension.”

According to Kaleo, the flagship cryptocurrency has defined a “new range” within which it is likely to consolidate for the next couple of months before scaling higher.

A Dec. 12 post from X social platform user Bankless pointed out that while the crypto market experienced the “worst day” in months on Dec. 11, the pull-back presented a “chance to buy the dip”.

Market intelligence firm Santiment

Has altcoin season arrived?

Crypto trader Remen wrote in an X (formerly Twitter) post that he believes the recent dump could push altcoins into another bull run. He added that it would take a long period of chops for the big crypto to resume an uptrend, as BTC dominance has topped out.

Even though some signs are there, it may still be too early to confirm the altcoin season. Altcoins are digital assets other than Bitcoin and the crypto community recognizes an altcoin season when the majority (at least 75%) of the top 50 coins by market cap outperform Bitcoin for 90 days. This has only been seen for a few altcoins, and it remains to be seen if more will follow suit.

According to Data from Blockchain Center, only 53% of the top altcoins have outperformed BTC during the last three-month period. Although this is a positive sign, it is still not enough to declare an altcoin season.

Altcoin season index. Source: Blockchain Center

In addition, Bitcoin’s market cap dominance is still above 50% since crossing this level on Oct. 1, reaching a high of 55.26% on Oct. 6, the highest in over two and a half years.

BTC market cap dominance. Source: TradingView

Bitcoin dominance fell to 52% on Dec.11 and as the price continued to dump, the crypto community began chanting the start of “altcoin season.” At the time of writing, BTC dominance is back to around 53.06%, just above its 50-day exponential moving average (EMA).

However, it remains to be seen if the oldest crypto will hold its position or if altcoins will continue rallying, with the shorter-term view showing that crypto markets could remain range-bound.