Bitcoin Needs to Surge to Initiate Altcoin Rally
With Bitcoin (BTC) edging closer to a market peak, numerous alternative coins are on the brink of a price upsurge, driven predominantly by investors looking to diversify their investments and reduce risks.
The cryptocurrency market is abuzz with talks of an imminent altcoin rally, where many coins are expected to leverage the recent momentum and, in many cases, outperform BTC.
Altcoin Rally Might Be Delayed
Typically, an altcoin rally commences when at least 37 of the top 50 alternative coins outperform Bitcoin over a 90-day period.
Currently, the data indicates that 17 of the top 50 altcoins are surpassing Bitcoin, with SUI leading the charge with an impressive 155% surge. Generally, altcoins tend to move in sync with Bitcoin, hitting local highs when market sentiment towards BTC is positive.
This alignment happens as investor trust in Bitcoin often spills over to the altcoin market, prompting traders to chase higher profits in these alternative assets.
Historically, halving years have often signaled the start of the accumulation phase for Bitcoin, usually followed by a peak. But a strong accumulation phase is yet to materialize, a crucial factor in setting the stage for an altcoin rally. As a result, unless BTC retests its all-time high, altcoins may only see short-term gains.
Bitcoin’s Course Holds Key Importance
Contrary to common perception, CryptoCrypto suggests that Bitcoin might be on the verge of a price adjustment, possibly pushing it below $64K unless this level transitions into strong support.
This anticipated correction would mark the fourth potential pullback since BTC last approached the $66K mark. Breaking through this milestone is essential for potentially revisiting an all-time high.
As stated earlier, the direction of an altcoin rally largely hinges on Bitcoin’s movement. When Bitcoin gains traction, altcoins typically trail behind. However, by the mid-stage, many altcoins often register higher daily profits than BTC. This pattern could signal the beginning of an altcoin rally, especially if more altcoins exhibit resilience against the expected BTC correction.
Hence, it is vital to closely monitor altcoins in this probable downturn. If most altcoins witness significant surges during this period, the likelihood of entering an altcoin rally towards the end of the next cycle could rise.