Bitcoin (BTC) plunged 8% on December 11 to a four-month low of $40,150, wiping out all of the gains of the past seven days.
This BTC price drop has triggered a market-wide re-evaluation and sparked debate about whether altcoins will likely lead the next significant rally in the cryptocurrency landscape.
Market experts and analysts believe that the recent price slump is part of an ongoing price cycle and that a correction is inevitable after two months of bullish surge.
Analyst Insights on Bitcoin’s Recent Downturn
Will Clemente, cryptocurrency analyst and co-founder of Reflexivity Research, sees this volatility as a necessary step in the evolution of the market, interpreting the market correction as a means to eliminate weak positions and reduce the highly leveraged cryptocurrency market.
BTC doubled in two months without any decline. The adjustment is not surprising.
Corrections shake out “weak hands” and leverage, ultimately providing a stronger foundation for higher upside.
Bitcoin’s volatility is a feature, not a bug.
Take advantage of https://t.co/BdvvS8KDZU to calm down.
— Will (@WClementeIII) December 11, 2023
Additionally, Kaleo, co-founder of the LedgArt NFT project, expressed through
According to Kaleo, the flagship cryptocurrency has defined a “new range” where it is likely to consolidate over the coming months before expanding to higher volumes.
As discussed in yesterday’s stream, the recent decline we have experienced was nothing more than a healthy correction following a large parabolic expansion.
I believe we have defined the upper and lower limits of the new range we are likely to trade in over the next month or two. pic.twitter.com/JOizKeJq3Q
— Kaleo (@CryptoKaleo) December 13, 2023
A Dec. 12 post from X social platform user Bankless noted that the cryptocurrency market suffered its “worst day” in months on Dec. 11, but that the decline presented a “dip-buying opportunity.”
Cryptocurrency markets had their worst day in months!
$TOTAL $1.5T defended
$BTC down 7.3%
$ETH down 7.5%Is this decline an opportunity to buy the dip?
Learn more at https://t.co/v5cYZ3OzH6 pic.twitter.com/JRrDJ0qyE7
— Bankless (@BanklessHQ) December 11, 2023
Market intelligence firm Santiment noted a significant surge in social media posts advocating ‘buying the dip’.
“#Crypto experienced its fastest decline in four months as markets corrected and sparked concerns among casual traders. #buythedip call levels are high, which usually means there is a bit of excessive eagerness and #FOMO for these low prices. ”
Bitcoin may have risen from multi-month lows, but the biggest winners right now are altcoins, as many cryptocurrencies have outperformed BTC over the past week.
Altcoins have bounced back in almost every period.
Altcoins have shown significant gains, outperforming Bitcoin over the past seven days. Some of them have performed better over the long term.
Bitcoin is down 1% over the past seven days, while Cardano (ADA) is up 49%, according to data from CoinMarketCap. Avalanche (AVAX), Polkadot (DOT), Solana (SOL), and Binance Coin (BNB) have also outperformed Bitcoin over the past week.
More importantly, while the pioneering cryptocurrency has risen about 60% in the last 90 days to $44,000, many altcoins have outperformed Bitcoin over the same period. In particular, AVAX competes fiercely with BTC, growing nearly three-fold in the past three months. SOL and ADA are up 267% and 150%, respectively.
In the short term, Cardano is leading the gains among the largest cryptocurrencies by market cap after rising 12% in the last 24 hours. Solana, another top layer 1 token, came in second with a 10% intraday gain, while Polkadot’s DOT rose 9.2% over the same period.
Meanwhile, Bitcoin recorded a 3% gain on December 13 despite recovering the key level of $42,000, suggesting that Bitcoin is still lagging altcoins. But can we really talk about the start of another altcoin season?
Related: 12/13 Price Analysis: BTC, ETH, BNB, XRP, SOL, ADA, DOGE, AVAX, DOT, MATIC
Is altcoin season here?
Crypto trader Remen wrote in a post on X (formerly Twitter) that he believes the recent dump could lead to another bull run for altcoins. He added that it will take a long time for the large cryptocurrency to resume its upward trend, as BTC dominance has peaked.
I told you about the flash dump over and over again.
The dump is now complete.
It will take a long time for Bitcoin to resume its upward trend
#1 in Bitcoin dominance
Now we enter the proper ALT SEASON.
take position
Tears of regret are tasteless
— RamenPanda (@IamRamenPanda) December 11, 2023
Even if there are some signs, it is still too early to confirm the altcoin season. Altcoins are digital assets other than Bitcoin, and the cryptocurrency community recognizes altcoin season when a majority (at least 75%) of the top 50 coins by market capitalization outperform Bitcoin for 90 days. This is only seen in a few altcoins, and it remains to be seen whether more will follow.
According to data from Blockchain Center, only 53% of the top altcoins have outperformed BTC in the past three months. While this is a positive sign, it is still not enough to declare altcoin season.
In addition, Bitcoin’s market capitalization dominance has still exceeded 50% since crossing this level on October 1st, reaching a peak of 55.26% on October 6th, recording the highest level in over two and a half years.
Bitcoin dominance fell to 52% on December 11, and as prices continued to fall, the cryptocurrency community began chanting for the start of “altcoin season.” As of this writing, BTC dominance is back at around 53.06%, just above the 50-day exponential moving average (EMA).
However, it remains to be seen whether the oldest cryptocurrencies will maintain their position or whether altcoins will continue their upward trend, and a short-term perspective suggests that the cryptocurrency market may remain range-bound.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.