Altcoins started the week with major tokens such as ETH, SOL, XRP, BNB, and DOGE undergoing corrections. Altcoin market capitalization hit a weekly close of over $1.6 trillion last week due to growing enthusiasm for altseason. With Bitcoin breaking above the $100,000 level, investors' expectations for the alternative season may have subsided.
Ethereum (ETH), Solana (SOL), XRP, and the general altcoin market experienced a pullback on Monday after their market caps exceeded $1.6 trillion last week. This correction shows that despite altseason speculation, Bitcoin's dominance still outweighs altcoins.
Altcoins fall as expectations for a massive alt season rise
Major altcoins such as ETH, SOL, XRP, BNB, and DOGE fell more than 4% on Monday following signs of exhaustion among the bulls. The pullback comes after the altcoin market posted a weekly close above $1.6 trillion for the first time since 2021.
Some cryptocurrency community members have suggested that this decline could be due to lower expectations for the alternative season after Bitcoin broke through the $100,000 level.
However, data from CryptoQuant CEO Ki Young Ju suggests that altcoins are not rising at the expense of BTC in the current cycle, given the growth in stablecoin liquidity in the market. are. This suggests that new money has flowed into the market to fuel the rally, rather than capital turnover from BTC.
This has sparked high expectations among crypto enthusiasts, who suggest that this correction is a temporary dip that will push altcoin market capitalization to new highs.
A look at past alt seasons also shows that this decline can be healthy for altcoins. In the 2021 market cycle, altcoins hit a new high in May 2021, experienced a significant decline a few weeks later, and then recovered to hit a new high in November.
Total virtual currency market capitalization excluding Bitcoin
As a result, traders may be positioning themselves to view declines as buying opportunities. This is evident in tokens such as SOL and TON, which are trading just below their all-time highs.
CryptoQuant data suggests that following the performance of BNB and Bitcoin over the past week, these two assets are favorites to surpass their previous ATH prices.
“Both projects are supported by strong fundamentals, including active development teams and active networks. Given these numbers, it seems likely that these coins will follow Bitcoin in the near future.” CryptoQuant analyst Martun said.
Additionally, the recent market decline has been attributed to the increasing correlation between altcoins and Bitcoin after falling by $100,000 over the weekend.
