Following the spot Bitcoin (CRYPTO: BTC) ETF approval, altcoins witnessed a price drop but analysis by investors pointed out that this is a correction phase and “buy the dip” scenario.
What Happened: After the spot Bitcoin ETF approval, altcoins reported softer losses than the crypto king. A recent Glassnode report stated the altcoin market cap has saw a 68.9% surge since the filing of BlackRock’s iShares Bitcoin Trust (NASDAQ: IBIT), aligning with the increase in Bitcoin’s market cap. Ethereum (CRYPTO: ETH) underperformed the wider altcoin space by -17%.
Since the FTX collapse in November 2022, Bitcoin expanded its market cap dominance from 38.9% to 49.8% while altcoins lost their market share in the overall crypto markets with their market cap dominance dropping from 28.3% to 24.2%.
Among the top 10 altcoins based on market cap, Ethereum is at the top followed by Binance Coin (CRYPTO: BNB), XRP (CRYPTO: XRP), Dogecoin (CRYPTO: DOGE), Cardano (CRYPTO: ADA) and Solana (CRYPTO: SOL).
For those unfamiliar, the basic definition of altcoin is any crypto asset other than Bitcoin. While in earlier years few crypto assets other than Bitcoin existed, there are now a wide variety of coins and tokens with various use cases and not necessarily Bitcoin competitors.
Why It Matters: Despite altcoins losing market share and trading under pressurized conditions, crypto analysts see this correction phase as a buying opportunity and a period of calm before a potential surge.
Crypto analyst, swing trader and long-term investor Capo Of Crypto highlighted in the Altcoins Market Cap chart that it is currently testing a major support. He said: “Also most altcoins look like they want a last high, that’s why I have added some exposure to alts (30%). Last leg up, then full reversal to new lows.”
Currently testing a major support. 5th wave of C is missing, and the main resistance hasn’t been reached yet. Also, most altcoins look like they want a last high, that’s why I have added some exposure to alts (30%)
Last leg up, then full reversal to new lows. pic.twitter.com/dGrQEHvB2J
— il Capo Of Crypto (@CryptoCapo_) January 24, 2024
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