Altcoins Season: Recent Cryptocurrency Price Drop Indicates the Decline May Have Ended

Altcoins are showing strong signs as the cryptocurrency market begins to recover from a significant correction in February. This recovery has pushed the total cryptocurrency market capitalization higher after bouncing off the $3 trillion mark on February 2. However, this correction has seen the altcoin market cap sharply decline after being rejected at $425 billion. Nevertheless, an important observation from cryptocurrency analyst Rekt Capital notes that despite being rejected at this significant resistance level, the pullback in altcoin market cap is still much shallower than previous retracements. This observation suggests that the buying side may be slowly taking control of the altcoins. Altcoin: Market capitalization is facing rejection at $425 billion, but Altcoins are becoming stronger. Rekt Capital's technical analysis emphasizes the importance of the $425 billion resistance level for the altcoin market, especially focusing on the market capitalization of altcoins outside the top 10. This analysis comes in the context of the broader altcoin market downturn over the past week, which follows a longer correction that began in early January when the market cap reached its highest level in years at around $440 billion. Despite facing strong resistance at this critical level, the depth of the latest pullback is still significantly shallower than previous corrections. The current pullback measures around 50% from the $425 billion resistance level, while the two most recent significant downturns saw larger declines of 69% and 85% respectively. This milder pullback is a change that may impact the trajectory of the altcoin market. The key point drawn from this trend is the clear weakening of the resistance level at $425 billion, indicating that the decline after the altcoin market retreat is not as strong as in previous cycles. Unlike previous cycles, where strong selling led to deeper declines, current price action signals an increasing likelihood of market recovery. What does this mean for the Altcoin season? Rekt Capital's analysis aligns with the expectations of investors eagerly anticipating the altcoin season. The relatively shallow retreat from the $425 billion resistance level reinforces the argument that this altcoin season could perform better than the previous two cycles. Cryptocurrency analysts like Rekt Capital are eagerly anticipating an altcoin season to occur, as profits from Bitcoin begin to flow into altcoins and the altcoin market will outperform Bitcoin. In another analysis, Rekt Capital noted that Bitcoin's recent rejection was around 64% dominance. However, he pointed out that history shows that a rejection at around 64% is mostly temporary, and the actual rejection is around 71%. When Bitcoin's dominance reaches this level, a repetition of history could lead to a very fierce rejection in a certain alt season cycle. Currently, Bitcoin's dominance remains strong and an official altcoin season has yet to emerge. Analysts like Benjamin Cowen believe that the expected altcoin price surge may be pausing, with Bitcoin continuing to absorb the majority of market liquidity. Until the dominance shows a clearer reversal, altcoin investors may have to wait a while longer.