Key Points
- Bitcoin’s resistance towards reaching $100,000 could lead to a renewed interest in altcoins.
- Five altcoins from the 2021 bull run are showing potential for significant gains in this cycle.
Bitcoin is facing resistance as it approaches its $100,000 target, which is causing renewed interest in the altcoin market. In a similar pattern to 2021, altcoins delivered substantial returns to investors when Bitcoin’s rally paused, and this scenario may be repeating itself in the current cycle.
Bitcoin’s Dominance Decreases, Altcoins Gain
On November 18, Bitcoin’s dominance reached 61.53%, the highest level since 2021. However, by November 26, 2024, this dominance had dropped to 58.97%. When Bitcoin’s dominance decreases, capital typically rotates into altcoins, potentially triggering a comeback for the altcoin season, where at least 75% of the tokens outperform Bitcoin over a 90-day period.
In the 2021 bull run, Bitcoin’s dominance fell to 40%, and altcoins began to rally, offering traders nearly double-digit gains. A similar event could drive altcoin prices higher in this bull run.
Is It Altcoin Season?
According to the altcoin season index on Blockchaincenter.net, there is a steady increase in the likelihood of an “alt season.” This occurs when 75% of the top 50 altcoins outperform Bitcoin over a 90-day period, excluding stablecoins like Tether, DAI, and asset-backed tokens like WBTC, stETH, and cLINK.
While it’s not yet altcoin season, there is steady progress towards it. Traders can begin preparing by adding relevant altcoin tokens to their portfolios in anticipation of potential profits in the coming weeks.
Altcoins Eyeing Massive Gains
During the 2021 bull run, altcoins like Avalanche (AVAX), Polkadot (DOT), Fantom (FTM), Internet Computer Protocol (ICP), and the Sui Protocol (SUI) could make a return in this cycle. Technical and on-chain indicators support the comeback of these assets.
The total open interest in the US dollar, a metric used to identify the value of all open contracts across derivatives exchanges in a given token, has recorded a spike for AVAX, DOT, FTM, ICP, and SUI on November 22. The volume traded in these assets and address activity remains close to average, indicating an increase in interest from crypto traders.
Top Altcoin Targets
Avalanche, Fantom, Sui Protocol, ICP, and Polkadot are the top five altcoins to watch in this cycle. Avalanche could extend its gains by 55% to revisit its March 2024 peak, and the target is at the $80 level. Fantom could rally 16% and revisit its March 2024 peak of $1.2292. Sui Protocol’s token could revisit its 2024 peak at $3.9409. ICP could retest its 2024 peak at $20.9850. Polkadot could extend its gains by 50% if the token makes a resurgence in the upcoming altcoin seasons.
The resurgence in altcoin prices is dependent on Bitcoin’s dwindling dominance and capital rotation out of BTC and into alts. If Bitcoin closes above $100,000 on the daily timeframe and climbs higher, the altcoin season could be delayed or pushed to early 2025.
Please note: This article is for educational purposes only and does not constitute investment advice.