Altcoins are likely to continue experiencing dramatic swings in price until Bitcoin manages to break past the $100,000 milestone, according to a leading crypto analyst.
“We’re waiting for that euphoric Bitcoin move before we see a significant shift in capital flow,” explained Pav Hundal, lead analyst at crypto exchange Swyftx, during his appearance at Aus Crypto Con 2024.
Altcoins Face Volatility
Hundal pointed out that while certain tokens, such as select memecoins, have shown promising performances, the broader altcoin market remains unstable. “There are hidden gems, but overall, altcoins are expected to stay unpredictable until Bitcoin crosses that crucial six-figure threshold,” Hundal noted.
Bitcoin came tantalizingly close to hitting $100,000 on Nov. 23, peaking at $99,605. However, at the time of writing, it had retreated slightly and was trading around $96,476.
Hundal added that altcoins could experience short-term gains of 20%, 30%, or even 40%, but these rallies are often followed by sharp pullbacks.
For example, Solana saw a 13% surge within 24 hours on Nov. 21 but lost nearly the same percentage of its value over the next five days. Similarly, popular memecoin Pepe soared 93.2% in one day after being listed on Coinbase and Robinhood, only to give up 22% of those gains the following day, according to CoinMarketCap.
Can Memecoins Repeat Past Cycles?
When asked about the potential for memecoins like PEPE to see explosive rallies similar to Dogecoin’s 800% gains in previous cycles, Hundal said such moves aren’t impossible. However, he emphasized that such rallies require significant capital inflows.
“These kinds of moves become feasible when Bitcoin dominance begins to decline,” Hundal explained. Bitcoin dominance refers to Bitcoin’s share of the total cryptocurrency market capitalization.
Bitcoin Dominance and Altcoin Season
Hundal believes Bitcoin dominance could climb as high as 65% to 70% before it begins to taper. At the time of writing, Bitcoin dominance stood at 58.3%, based on TradingView data.
Other analysts are predicting a shift as well. On Nov. 28, crypto trader Mikybull Crypto suggested via X (formerly Twitter) that sharp declines in Bitcoin dominance could begin as early as next month.
However, not all experts agree that the altcoin market will mirror past cycles. CryptoQuant CEO Ki Young Ju recently argued that the current Bitcoin rally, driven by institutional investors, may not lead to a traditional altcoin season.
“Institutional players and ETF buyers are focused on Bitcoin and show little interest in speculative tokens,” Ju explained to his 374,200 followers on X. “For altcoins to hit new all-time highs, fresh capital must flow into crypto exchanges, and so far, we haven’t seen enough liquidity from new users.”
The Road Ahead
While Bitcoin’s journey to $100,000 will likely be a turning point, the path for altcoins remains uncertain. Until Bitcoin dominance retreats and new capital enters the market, altcoin investors may need to brace for continued volatility.
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