Key Points
- Analysts believe the altcoin sector may have reached its local bottom, but risks remain for a strong altcoin season.
- Altcoins such as MANTRA [OM], Litecoin [LTC], and Hyperliquid [HYPE] have shown significant gains despite the overall market downturn.
The altcoin sector may have reached its local bottom, according to some analysts. Despite the risks, there is hope for a strong altcoin season.
Analyst Mathew Hyland believes that the sector’s resilience in the face of the Federal Reserve’s decision not to cut rates aggressively, and its avoidance of Quantitative Easing (QE), is a sign of a bottom.
Altcoin Season Index and Market Factors
Since late January, most altcoins have lost between 20%-90% of their value. This has brought the altcoin season index to a crucial point relative to Bitcoin.
However, numerous factors could affect a potential rebound. For instance, the large number of tokens vying for liquidity could hinder a broad-based altcoin recovery.
Only select altcoins might experience a strong rebound if an altcoin season occurs. A key risk factor could be the high dominance of Bitcoin (BTC.D), which has risen from 55% to over 60% since last December, draining liquidity from altcoins.
Not All Altcoins Are Affected Equally
Not all altcoins have been negatively impacted by the market downturn. Some, like MANTRA [OM], Litecoin [LTC], and Hyperliquid [HYPE], have seen double and triple-digit gains over the past thirty days.
Despite the overall market contraction, these altcoins have managed to thrive.