The recent Federal Reserve FOMC meeting has caused a shift in the cryptocurrency markets, leading to significant drops in many altcoins following Jerome Powell’s speech. In the past 24 hours, various coins have experienced a major hit, impacting the short-term trajectory of the market. Analyst Miles Deutscher believes that while these changes may affect the immediate future, they do not change the overall bullish outlook for the long term. Currently, Bitcoin’s dominance is on the rise, but there are indications of a possible dip before altcoins start to rally.
Historically, after a correction in Bitcoin, altcoins tend to follow suit and experience substantial growth. This pattern suggests a potential altcoin rally towards the end of January, aligning with typical market cycles. Despite this, many new retail investors may panic during market dips, particularly concerning coins like XRP or DOGE. However, it is crucial to note that most bear markets do not begin with a 15-20% correction. Such dips often present excellent buying opportunities and can be advantageous for positioning oneself for future gains.
Crypto analyst Lark Davis has identified a historical pattern indicating significant potential for the altcoin market. As of December 18, the total market cap of altcoins (excluding Bitcoin and Ethereum) sits at around $1.05 trillion, nearing the high from November 2021. The last time the market reached a similar level was in February 2021 when it broke through and surged over 200%. Davis suggests that once the market cap surpasses $1.13 trillion, we could witness one of the most substantial altcoin seasons to date.
Davis highlights several factors driving this anticipated growth, including Bitcoin reaching new all-time highs, the upcoming change in presidential administration, global rate cuts, and increased capital inflows into the market. Given these conditions, Davis cautions that those not currently involved in the market may miss out on significant gains during the forthcoming altcoin rally.