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Is the Altcoin Party Over? Bitcoin Dominance Threatens Alt Sector!
December 22, 2024
In a recent alert, analyst Joao Wedson has warned of potential bearish signals in the altcoin market. As Bitcoin’s [BTC] dominance reaches new heights, many are left wondering if the alt season is indeed over.
Wedson, founder of Alphractal and an on-chain analyst, has cautioned against investing in altcoins at the current market price. According to his analysis, the recent sell-off following BTC’s correction has led to massive discounts for several top and mid-cap altcoins. Wedson believes that this is a clear indication that capital is flowing out of the altcoin sector and into Bitcoin and stablecoins.
The data does not lie. The altcoin season index has slipped below 50%, marking a new monthly low. Several top-tier alts have seen significant losses, with Ripple [XRP] and Cardano [ADA] taking some of the biggest hits. Even Ethereum [ETH], traditionally a stalwart in times of market downturn, has not been immune to the sell-off, dropping a modest 6% and defending $3.5K as support.
It’s difficult to ignore Wedson’s warning when considering the data at hand. With Bitcoin’s dominance reaching new highs above 54%, it seems increasingly unlikely that altcoins will be able to mount a strong rebound in the near term. And yet, some coins are defying the bearish trends. Hyperliquid [HYPE] and Pudgy Penguins [PENGU], two coins previously unknown to many, have seen astonishing gains of 40% and 425%, respectively.
While these outliers have sparked hope that perhaps there is still life left in the altcoin party, it’s hard not to be swayed by Wedson’s concerns. The bearish signals are undeniable, and with no clear catalyst for a reversal in sight, many traders may find themselves stuck on the wrong side of this trend.
The question remains: will we see a ‘Santa rally’ boost altcoins’ prospects? For now, it seems as though the Altcoin season party may indeed be over.
Source: ambcrypto.com
