Altseason draws nigh, but first technicals point to a steep correction


  • The altcoin market cap is at a healthy level, the next bull run eyes new all-time highs.
  • Altcoins such as Ethereum, Ripple, and Litecoin need to decouple from Bitcoin for an independent altseason.

The cryptocurrency market capitalization recently crossed the $1 trillion level for the first time in history. However, the market value has dived to the current $910 billion following the massive retracement in Bitcoin price from highs above $40,000 to intraday lows of $33,344.

While Bitcoin takes up the larger chunk of the market value, altcoins have also performed relatively well. Notably, Bitcoin's dominance has been maintained under 70%. At the time of writing, altcoin's market value stands at $280 billion, leaving Bitcoin with the larger $628 billion.

Altcoin market capitalization still impressive

During the ongoing bull run, the altcoin initial impulse wave hit $320 billion. A retreat has been embraced, but if the market value is to hold above $225 billion, the next bull cycle will likely elevate the altcoin market capitalization nearer to the new all-time highs.

crypto market cap

Altcoin market cap

Altcoins, especially the major ones like Ethereum, Ripple, and Litecoin, is still massively correlated to Bitcoin. Over the last 24 hours, Bitcoin has plunged, losing nearly 20% of its value following a rejection from $40,000.

Similarly, Ethereum tumbled in tandem with Bitcoin losing over 20% of its value to exchange hands at $1,040. Consequently, Ripple is down 25% and is currently trading at $0.26, while Litecoin has dropped to $136 on losing 25% of its value.

This proves the altcoins' correlation to Bitcoin is perhaps due to Bitcoin's enormous market share. Therefore, the altcoin season is possible, but investors have to pay more attention to the tokens, which could diversify their investments. Breaking from Bitcoin will allow the tokens to chart their path while ignoring Bitcoin swings (consider the recent volatility to $42,000 and back to $33,000).

According to a famous cryptocurrency trader, NebraskanGooner, it is essential to keep in mind possible technical corrections, conceivably sharp ones, before the altcoin season fully kicks in.

Moreover, it may not be wise to go all-in on any entry because, as an investor, you need some extra funds to add on a dip. On the other hand, adding more during confirmed breakouts tends to yield fast and stress-free gains.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Bitcoin bulls ignore China warning amid a potential rally to $45,000

Bitcoin has kicked off the August month on the right footing, looking to extend the previous week’s 15% gains amid favorable fundamental and technical catalysts. Looking at the daily chart, the BTC price is gathering pace to initiate a fresh upswing towards the horizontal 200-Daily Moving Average (DMA) at $44,750.

More Bitcoin News

Dogecoin price preps up for a rally towards $0.30

Dogecoin price is jumping this Sunday, displaying a solid start to August, as a fresh buying wave grips the crypto market. DOGE price confirms a triangle breakout on the 4H chart. The bulls target $0.30 amid the renewed upside momentum.

More Dogecoin News

Shiba Inu Price Prediction: Tide turning in favor of SHIB bulls, as $0.00000750 beckons

Amid an upbeat momentum seen across the crypto board, Shiba Inu is looking to extend Saturday’s upswing from near the $0.00000590 support area. The focus remains on Sunday’s close to confirming a falling wedge breakout on the 1D chart.

More Shiba Inu News

Ethereum Price Prediction: $2500 - a tough nut to crack for amid impending death cross

Ethereum’s daily chart shows that the price is lacking a follow-through upside momentum, as the bears are awaiting confirmation of a death cross formation. However, with the RSI still trending above the midline, the ETH buyers could defy the bearish warning. 

More Ethereum News

BEST CRYPTO BROKERS/EXCHANGES



Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast

BTC

ETH

XRP