Altcoins took a big blow in the wee hours of Wednesday morning after Bitcoin price slipped below the $60,000 support level. The total crypto market cap dropped by 6.7% as alts witnessed double-digit losses. Nevertheless, several tokens have shown promise of rebounding as whale activity increased, giving investors a reason to “sell their houses” and bag more tokens.
Altcoins Prepare for Historic Rebound
Data from Dune Analytics Alts Buy Signal suggests that altcoins are about to explode. The last time Bitcoin reached around 10% on the indicator was exactly four years ago, in the summer of 2020. After that, the price went vertical from $10,000 to $69,000 over the next six months.
Now, alts are in the same position and are about to break above the 10% mark. Could this lead to the greatest altcoin run in history?
Additionally, the Global Macro Investor data shows altcoin outperformance over time, whereas in early to mid-2019, alts hit a low below 10% (oversold). From that bottom, the alts outperformed till early 2020 before they began consolidating and eventually peaked in mid-2020.
A similar pattern may repeat in the current cycle as alts bottomed in early to mid-2023 and peaked in early 2024. Altcoins may be entering a consolidation phase before they see huge outperformance later this year.
Meanwhile, the Tether printer has not stopped printing. The supply of USDT minted in the last week stands at $744.087 million. In 2024 alone, Tether has added $26.522 billion to its circulating supply. The more liquidity, the more likely the price will take off.
Bitcoin Dominance Still Reigns Supreme Over Alts
Despite the recent dip in BTC price, altcoins still struggle to outperform Bitcoin as dominance increased by 0.85% in the last seven days. The Bitcoin Dominance chart also shows a cup and handle forming that may send it to 59%. This would deliver a big blow to alts.
The total altcoin market cap is still trending below the Bitcoin market cap. Additionally, although BTC and altcoins have lost value today, the latter shed more than the former.
The TradingView chart comparing BTC and altcoin market cap performance shows the latter lost 16.68% in the last 24 hours while Bitcoin only lost 9.94%. This explains why, despite the drop in prices, Bitcoin dominance spiked.
In summary, these observations hint at the potential for alts to rally. The altcoin market cap has strong support at the $850 billion level, which may be used as a bounce-off point to surge higher.
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