Bitcoin (BTC) has slightly retraced after an impressive run above $50,000 earlier this week. While the leading cryptocurrency tries to discover its current supports and resistances, altcoins might offer good risk-reward ratios.
In the meantime, expert traders discuss their expectations and investment thesis on the altcoin market. An altcoin is any cryptocurrency that is not Bitcoin and usually shows higher volatility.
Essentially, investors expect altcoins to outperform BTC in bull markets and underperform the leader in bear markets. The expert trader known as CrediBULL Crypto has commented on these dynamics.
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In particular, he explained that an Altcoin rally is not necessarily when money rotates from Bitcoin to other cryptocurrencies. Instead, it is mostly fueled by a capital inflow to the whole market, causing larger price increases in smaller market caps.
Bitcoin dominance and altcoins pump incoming
Nevertheless, Bitcoin dominance (BTC.D) is a reliable indicator of an altseason – when altcoins pump and outperform BTC. Notably, BTC.D reached a third-consecutive lower-high at 54.03% on February 12, suggesting a dominance downtrend.
Bitcoin currently has around 53.62% of the entire market’s capitalization, which is expected to decrease during an altcoin rally.
Meanwhile, another expert trader, Cevo on X (formerly Twitter), eagerly awaits more volatility and an altcoin expansion phase. However, he has also warned that pumps and dumps will be “more aggressive from now on.” Urging investors to “stay calm and make decisions with a clear mind.”
On the other hand, Bitcoin must be able to hold its current levels for altcoins to flourish. Cryptocurrencies will likely follow any relevant retracements from the leader, delaying the awaited expansion phase or altseason.
All in all, it is evident how investors must learn about risk management and how to control their emotions moving forward. The cryptocurrency market is naturally uncertain and volatile, but according to Cevo, these characteristics could increase in 2024.
Finbold has published a list of altcoins below $1 billion and $10 billion to watch for the year.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
