Although Bitcoin recent price plunge has sent several Altcoins on a free fall, with declines ranging from 30% to 70%, there appears to be a beacon of hope set to shine through the murk.
The recent Bitcoin Halving in April is what the altcoin market needs to recover and surge beyond its highest levels.
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Bitcoin Halving: A Gateway to Altcoin Prosperity?
Bitcoin usually undergoes a Halving every four years, and this major event halves the block reward for miners in half. This fall in supply has normally triggered a bullish rally not only for Bitcoin but also for the altcoin market.
Crypto analyst Wise Advice elaborates that following each Bitcoin halving, there is a pronounced potential for altcoins to surge. The analyst particularly noted:
I know when altcoin season will happen. And Iโll show you itโฆ โHalvingโ It all depends on it [โฆ] When halving happens, after 1โ1.5 years, the BTC ATH come And near that, ETH and other altcoins boom.
Historically, this Halving period has seen an explosion of attention for altcoins, driving their prices higher due to the scarcity concerns from Bitcoin following this event.
For example, in the previous Bitcoin Halving on November 9, 2021, leading altcoins, including โ Ethereum (ETH) and Solana (SOL), Polkadot. (DOT), Avalanche (AVAX) all recorded a new all-time high.
For context, ETH peaked at $4,800 on November 10, SOL came in too with its new peak at $250 5 days earlier as revealed by Wise Advice, while DOTโs peak at $55 happened on the 4th of that month, and AVAX peak at $144 occurred later that month on the 21st.
How Does The Halving Points To Alts Season Now?
As Wise Adviceโ post suggests, such patterns underscore a recurrent theme: post-halving, money flows from Bitcoin into altcoins, significantly buoying their market positions.
The analyst explained:
The more they buy, the higher the price goes. And it makes investors profitable. They sell a part of it and send to Ethereum and other tokens. The market cap of these are way lower, so even the inflow of $100 million can make a huge change (a month before the ATH, Bitcoin MC was in 2.5 times larger than Ethereum.) Thatโs why Solana and Polkadotโs ATH was 4-5 days faster. Then money goes to even smaller Alts. And they start to overperform big ones. The smaller they were, the bigger the growth was.
Notably, this shift is often reflected in Bitcoinโs dominance indexโa metric that measures Bitcoinโs market capitalization relative to the total market cap of all cryptocurrencies. As observed post-halving, a decline in this index signals a growing interest in altcoins.
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Bitcoin dominance is now at 54.60%, a slight decrease from above 55%. Earlier this month, according to TradingView. Notably, the fact that the index is still somewhat high, as it still stands above 50%, suggests that the market still favors BTC.
However, the recent decrease could be the early signs of an emerging altcoin season. Analysts at Glassnode make a similar point, linking present market circumstances with those in late 2020 when smaller stocks and riskier assets boomed, pointing towards an impending altcoin season.
Rotation coming?
Yesterday, we saw how #Nasdaq declined >2% โ while #IWM rallied >3%.
This is a clear indication of Rotation. The move to riskier assets.
Will we also see this is #BTC and #Alts?
Well โ in November 2020, we had a day just like yesterday. IWM soared andโฆ pic.twitter.com/WG9pooRxh1
โ ๐ก๐ฒ๐ด๐ฒ๐ป๐๐ฟ๐ผ๐ฝ๐ถ๐ฐ (@Negentropic_) July 12, 2024
Featured image created with DALL-E, Chart from TradingView
