In the past market cycle, altcoin and Bitcoin pairs experienced a capitulation in June 2019, right before the United States Federal Reserve made the decision to cut interest rates. Interestingly, the pattern on the charts for this cycle appears to be quite similar. It is possible that we may witness a final flush out of altcoins prior to this month’s Fed rate decision on June 12. The recent dip in both crypto and stock markets following the U.S. jobs data release could suggest that the Fed might maintain the current interest rates. Despite this, analysts remain optimistic about the potential of an approaching altseason.
On June 8, crypto analyst ‘Moustache’ drew parallels between the last market cycle and the current one, highlighting the structural similarities and noting that while history doesn’t repeat itself, it often rhymes. MN Trading cofounder Michaël van de Poppe expressed his views on the recent market correction, anticipating a bullish breakout in the upcoming week and maintaining a positive stance on altcoins. Similarly, ‘Mister Crypto’ informed his 120,000 followers that Bitcoin season seems to have bottomed out and that altseason could commence shortly. Industry observer ‘Viktor’ shared a comparable chart, indicating similarities with past market conditions in 2023 and during the April crash.
Bitcoin market dominance serves as a crucial indicator for an impending altcoin rally. Currently standing at 55.2%, it has surged by nearly 8% since the beginning of the year, as per TradingView data. However, for a full-fledged altseason to kick in, Bitcoin dominance must drop below the 50% mark, which doesn’t appear to be happening anytime soon. Ethereum, often considered a leading indicator for altcoin rallies, has also faced a setback lately, with a 3.3% decline over the past week plunging to $3,680 on June 9. Altcoins, in general, are experiencing a period of distress, evidenced by widespread losses, particularly notable in Toncoin (TON), Shiba Inu (SHIB), and Near Protocol (NEAR).
If the Federal Reserve decides to maintain interest rates between 5.25% to 5.50% next week, the crypto markets, especially altcoins, may witness further volatility and challenges before any substantial gains become visible. The upcoming weeks could prove to be critical in determining the direction of the crypto market and the onset of a potential altseason. Investors and traders are advised to closely monitor these developments and stay informed about market trends to make well-informed decisions.
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