A shift in the cryptocurrency market is underway, with altcoins taking the lead as top performers in recent weeks. Around 60% of the weekly top performers are Altcoins, signaling a change from past cycles where memecoins often held this spot. Cardano (ADA) alone has posted impressive gains, surging over 25% in a single week. Yet, with many altcoins nearing or even surpassing historic resistance levels, there is growing apprehension about an impending market correction.
Despite this rally, market watchers are cautious. Just days ago, a major transaction saw an investor spend 235 ETH, equivalent to around $400,000, to buy 33.35 million Dogecoin (DOGE). This indicates that certain investors are betting on the potential for memecoins to rebound strongly if altcoins slow down. With the weekend forecasted to be bullish for altcoins as Bitcoin weak-hands sell off for gains, there’s a chance that the market could mirror patterns from previous cycles.
Altcoin Season May Be Delayed
Historically, an altcoin season or a “memecoin supercycle” typically follows a peak in Bitcoin’s (BTC) price, which directs liquidity from BTC into high-cap altcoins. As Bitcoin approaches critical resistance zones, risk-averse investors often sell off, redirecting capital into alternative digital assets.
Dogecoin’s recent gains provide a glimpse of this trend. In mid-to-late October, DOGE broke out from an eight-month consolidation phase, generating considerable gains even as BTC encountered significant pullbacks. This performance positions Dogecoin as a potential frontrunner should a memecoin rally reignite.
Meanwhile, Ethereum (ETH), the largest altcoin by market cap, performed somewhat weakly during the same period but has recently rebounded with over 16% weekly gains. This bounce has rekindled optimism for an altcoin season, increasing Ethereum’s market cap by 3% to reach $351 billion, bringing over 3 million addresses into profitability. However, the risk of holders selling ETH for DOGE – particularly as ETH approaches key psychological levels, like $3,000 – could hinder momentum in the broader altcoin market.
Also Read: Bitcoin’s Dominance Hits 59.77 – What This Means For Altcoins And The Future Of Crypto
Memecoin Cycle on the Horizon?
DOGE’s recent 20%+ surge hints at growing interest in memecoins, especially with ongoing endorsements from Elon Musk. Musk’s influence, paired with his political ties, has attracted more investors, with large holders accumulating over $800 million worth of DOGE following the recent U.S. election. As a legacy memecoin, DOGE may lead the charge, setting the pace for other memecoins. So far, Solana-based memecoins have lagged behind, but if DOGE maintains its momentum, the broader memecoin market could see a renewed influx of interest.
Market Dynamics Ahead
The upcoming week will likely bring further shifts in the crypto market. While altcoins continue to show strength, memecoins are well-positioned for a potential rally. Analysts believe that Bitcoin may breach the $80,000 mark in the near future, which could further fuel the current trend. For now, memecoins remain a step ahead, but with such dynamic market conditions, the balance may yet tip back in favor of altcoins in the months to come.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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