The performance of altcoins this week suggests “rapid derisking across the high-beta segments” of the crypto market.
“Speculative appetite” declining across the crypto market
Several major altcoins also slumped in the past week. Solana
SOL$163.18 has been down 9.45% over the past seven days, while XRP
XRP$2.92 has retraced 5.48% and Dogecoin
DOGE$0.1995 has been down 10.80%.
“Interestingly, this break did not translate into a sustained altcoin bid — quite the opposite,” Bitfinex analysts said in a markets report on Tuesday.
These declines came despite signals that have historically preceded altcoin rallies.
Over the past 30 days, Bitcoin dominance has dropped by almost 5.5%, while Ether has surged by 40%, signs that traders may be rotating into riskier assets.
A period of consolidation could be coming
Still, the simultaneous decline in altcoins suggests that investors may be taking profits instead of moving further out on the risk curve.
“This capitulation in altcoins alongside Bitcoinʼs weakness suggests that speculative appetite is now receding across the board,” they said, adding:
Ongoing hope for altcoin rally
Not all analysts are convinced that altcoin season is off the table.
In an X post on Tuesday, crypto analyst Ted said, “This is your best opportunity to stack utility alts before they go parabolic.”
Related: Bitcoin options point to growing caution: BTC price to $110K next?
Merlijn The Trader said, “Alts coiling for a violent breakout,” adding, “When this spring releases… It’s game on,” pointing to the altcoin season chart pattern resembling previous years of corrective phases before another upward trend.
On July 21, the CoinMarketCap Altcoin Season Index signaled “Altcoin Season” with a 55 out of 100 score. By Tuesday’s update, it had flipped to “Bitcoin Season,” dropping to a score of 40 out of 100.
