While the recent decline in the price of Bitcoin has caused many altcoins to plummet in value, with declines ranging from 30% to 70%, there appears to be a glimmer of hope amid the gloom.

The recent Bitcoin halving in April is a signal that the altcoin market is set to rebound and surpass its all-time highs.

Bitcoin Halving: A Gateway to Altcoin Prosperity?

Bitcoin typically goes through a Halving every four years, and this major event halves the block reward for miners. This drop in supply typically sparks a bull run not only for Bitcoin, but also for the altcoin market.

Smart Advice from a Cryptocurrency Analyst is developing that after each Bitcoin halving there is clear potential for altcoins to grow. The analyst noted in particular:

I know when altcoin season is coming. And I’ll show you…’Halving’ It all depends on it […] When halving happens, after 1–1.5 years, BTC reaches its ATH. And when it does happen, there is a edged enhance in ETH and other altcoins.

Historically, the Halving period has been characterized by a surge in interest in altcoins, which has led to a rise in their prices due to concerns about a Bitcoin shortage following the event.

For example, during the previous Bitcoin Halving on November 9, 2021, leading altcoins including — Ethereum (ETH) and Solana (SOL), Polkadot. (DOT), Avalanche (AVAX) — all recorded novel all-time highs.

For comparison, ETH peaked at $4,800 on November 10, SOL hit a novel high of $250 5 days earlier as revealed by Wise Advice, DOT peaked at $55 on the 4th of that month, and AVAX peaked at $144 at the end of that month on the 21st.

What does the altcoin halving point season look like right now?

As Wise Advice suggests, such patterns underscore a recurring theme: after the halving, money flows from Bitcoin to altcoins, significantly strengthening their market position.

The analyst explained:

The more they buy, the higher the price. And investors are profitable. They sell some and send to Ethereum and other tokens. The market cap of these tokens is much lower, so even an inflow of $100 million can cause a huge change (a month before ATH Bitcoin MC was 2.5 times bigger than Ethereum). That’s why ATH of Solana and Polkadot was 4-5 days faster. Then money flows into even smaller altcoins. And they start to outperform the large tokens. The smaller they were, the bigger the growth was.

Interestingly, this change is often reflected in the Bitcoin Dominance Index — a metric that measures Bitcoin’s market capitalization relative to the total market capitalization of all cryptocurrencies. As seen after the halving, a drop in this index signals growing interest in altcoins.

Bitcoin’s dominance currently stands at 54.60%, down slightly from above 55% earlier this month, according to TradingView. Interestingly, the fact that the index is still quite high, as it is still above 50%, suggests that the market still favors BTC.

However, the recent decline could be an early sign of the upcoming altcoin season. Analysts at Glassnode make similar predictions pointcombining the current market situation with that of tardy 2020, when smaller stocks and riskier assets boomed, pointing to the upcoming altcoin season.

Rotation coming?

Yesterday we saw how #Nasdaq dropped >2% – while #IWM increased by >3%.

This is a clear sign of Rotation. A move to riskier assets.

Will we see this too? #BTC AND #Alts?

Well – in November 2020 we had a day like yesterday. IWM soared and… photo:twitter.com/WG9pooRxh1

— 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 (@Negentropic_) July 12, 2024

Featured image created with DALL-E, chart from TradingView