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The altcoin market appears to be setting the stage for one final significant rally during the ongoing cryptocurrency market cycle, industry analysts suggest. Recent insights emphasise that only altcoins with substantial real-world utility, strong fundamentals, and high network activity will notably benefit from such a move. The current situation calls for cautious optimism, with experts advising traders to focus heavily on tangible engagement metrics rather than speculative hype.
Key Developments
Speaking on an April 3 livestream, Real Vision’s chief crypto analyst Jamie Coutts stated that the ALT market might experience a “breadth thrust” within the upcoming two months. Coutts predicted the recovery would disproportionately favour cryptocurrencies, demonstrating solid fundamentals, genuine use cases, and renewed user interest.
Coutts further advised traders to prioritize tracking blockchain network activity, asserting it is the critical indicator or the “north star” for identifying promising altcoins. The analyst anticipates market momentum potentially intensifying by June, especially if Bitcoin approaches or exceeds previous all-time highs.
Bitcoin Dominance Signals Awaited Shift
Technical analyst Rekt Capital argued in his recent update that a true altcoin rally (alt season) becomes inevitable when Bitcoin’s dominance significantly declines. According to his latest analysis, Bitcoin’s dominance—currently around 62.84%—needs to drop from near 71% levels to signal the commencement of a substantial alt revival.
Market commentator Sensei recently pointed to technical patterns on the Bitcoin dominance chart, indicating a potential reversal. Specifically, Sensei identified a rising wedge pattern, widely considered a bearish signal among technical traders. This pattern suggests Bitcoin dominance might have already peaked, thereby setting the conditions for ALT price action to strengthen.
Trading Volume Gains Priority Over Dominance Metric
The conventional Bitcoin dominance metric may no longer serve as the primary indicator for predicting ALT season, according to CryptoQuant CEO Ki Young Ju. He emphasized that ALT trading volumes have notably surpassed Bitcoin’s by nearly 2.7 times. This development signifies that market participants increasingly prioritise trading volume and direct stablecoin-to-altcoin flow rather than traditional dominance indicators.
Selective Altcoin Recovery Expected
The current altcoin landscape includes millions of cryptocurrencies. Yet, only a limited number hold significant real-world value. Ethereum continues dominating the Total Value Locked (TVL) metric, controlling 55.56%, followed by Solana, Bitcoin, BNB Smart Chain, and Tron. This concentration indicates that investors prefer established networks with proven utility rather than speculative, low-utility tokens.
Altcoin Speculation Index Indicates Investor Caution
Metrics from Capriole Investments show altcoin speculation has dropped significantly, hitting lows of around 12%—a notable decrease of approximately 53% since December. Additionally, Ethereum’s value has similarly fallen nearly 50% from its recent peak in December, reflecting broader market hesitance to embrace riskier crypto investments.
CoinMarketCap’s Altcoin Season Index confirms Bitcoin’s ongoing dominance with a current score of 14 out of 100. According to this index, the cryptocurrency market remains within a “Bitcoin Season,” characterized by Bitcoin outperforming most other digital assets. This environment indicates ALT’s still need robust triggers before broader investor confidence returns.
Analysts Caution Short-term Volatility Risks
Industry veteran Arthur Hayes, co-founder of the cryptocurrency exchange BitMEX, recently addressed ongoing market turbulence. Hayes underscored Bitcoin’s critical support at the $76,500 price point until April 15, aligning with the U.S. tax deadline. According to Hayes, maintaining above this price level would constitute a bullish signal. Meanwhile, analysts from 10X Research suggested Bitcoin could potentially revisit lower levels around $73,000 without new catalysts fueling sustained market enthusiasm.
Amidst market uncertainty, experts reinforce the importance of focusing investments toward ALTs with demonstrable practical utility, solid project fundamentals, and consistent network activity. With the broader cryptocurrency market navigating through an uncertain environment, speculative assets lacking concrete use cases may continue struggling to achieve significant growth.
Conclusion
As altcoin speculation begins resurfacing cautiously, experts warn investors to remain selective and cautious. Analysts universally stress the importance of network activity metrics, genuine user adoption, and established fundamentals when considering ALT investments. If predictions prove accurate, a carefully targeted approach based on demonstrable utility and blockchain engagement could lead savvy investors to notable returns in the anticipated ALT rally over the coming months.
Frequently Asked Questions (FAQ)
1- What is an Altcoin?
An altcoin is any cryptocurrency other than Bitcoin. Examples include Ethereum, Solana, and Binance Coin (BNB).
2- What does Bitcoin dominance mean?
Bitcoin dominance refers to Bitcoin’s market cap share compared to the total cryptocurrency market. A lower dominance often signals increased investor interest in altcoins.
3- What triggers an altcoin season?
Traditionally, declining Bitcoin dominance and increased trading volume in altcoins signal the start of an altcoin season.
4- Are all altcoins likely to benefit from the anticipated rally?
No, analysts suggest only altcoins with practical, real-world use cases, strong fundamentals, and active user bases will significantly benefit.
Appendix: Glossary of Key Terms
Altcoin – A cryptocurrency alternative to Bitcoin, often offering diverse functionalities and utilities.
Breadth Thrust – A rapid increase in market participation and trading activity, indicating strong momentum.
Bitcoin Dominance – The ratio representing Bitcoin’s market capitalization compared to the entire cryptocurrency market.
Trading Volume – Total amount of cryptocurrency traded within a specific time frame, reflecting market interest and liquidity.
Total Value Locked (TVL) – A metric showing total assets staked or deposited in decentralized finance (DeFi) protocols, indicating adoption and user trust.
References
Crypto.News – crypto.news.com
CryptoNews – cryptonews.com
