Over the span of six weeks, the total market capitalization of cryptocurrencies has dwindled by 12.3%, dropping from $3.73 trillion to $3.42 trillion. The optimism that prevailed in the crypto space during November and December, characterized by Bitcoin’s surge towards and surpassing the $100k milestone, has significantly waned.
While Bitcoin has consolidated around the $100k mark amidst this loss of confidence, altcoins have experienced substantial declines in value over the same period.
PEPE [Pepe] has undergone a significant slump of 57.8% from its peak in the second week of December. Nevertheless, there is a possibility that this meme-inspired digital asset has reached a price floor.
Comparing Pepe to Dogecoin – Recalling the Events of February 2024
In a post on X (previously known as Twitter), Max Schwartzman, the founder of BecauseBitcoin, drew attention to the fact that in 2024, the PEPE/DOGE trading pair revisited a critical support level before embarking on an upward trajectory.
Essentially, an increase in the PEPE/DOGE ratio indicates that Pepe is likely outperforming Dogecoin in the market. This was evident in February and March 2024 when PEPE significantly outshone DOGE following a retest of a crucial price level that instigated a robust rally in November.
Schwartzman pointed out that a similar pattern seems to be unfolding once more, hinting at the potential for Pepe to record extraordinary gains in the upcoming weeks.
Assessing the Prospect of an Altcoin Season
While the PEPE/DOGE pair might have hit a bottom, the broader altcoin market may not have reached a similar point yet. The long-awaited altcoin season has yet to materialize, with the gauge currently positioned at 53. Nonetheless, this scenario bears a resemblance to the conditions witnessed in February and March 2024.
During that time, BTC also witnessed substantial appreciation following the approval of spot ETFs, catapulting from $42k to $72k within six weeks.
An analysis of Bitcoin’s market dominance throughout various cycles reveals that BTC.D is hovering near a crucial long-term resistance level.
A rejection akin to the one observed in November, which gave rise to a brief alt-season, could be on the horizon. This potential development might bolster the efforts of Pepe’s bullish investors.
As evidenced in the previous year, both Bitcoin and altcoins have the capacity to surge. However, the likelihood of a repeat performance remains uncertain. The prevailing market sentiment is weighed down by elevated fear, leading many participants to hesitate in “buying the dip” as they contemplate the possible conclusion of the cycle.
It is in such apprehensive conditions that purchasing assets could yield substantial returns, but investors must exercise caution and remain cognizant of the associated risks, as the outcome this time around may differ significantly.
Disclaimer: The views expressed in this article are personal opinions and do not constitute financial, investment, or trading advice. Readers are advised to conduct their research before making any financial decisions.