Crypto traders are eagerly anticipating the next altcoin season, but before that happens, the market could see a major correction. The market is not in favor of altcoins and ,any analyst have predicted that altcoin season is delayed due to multiple factors like less retail interest, memecoin frenzy and Trump’s tariff war. At present altcoins outside the top 10 are struggling, with their total market cap hitting a three-month low of $277 billion, per TradingView. That’s a steep 77% drop from their $492 billion peak in November 2021.
Looking at the current scenario, Crypto analyst Il Capo, said that altcoins may drop by 20%-40% before the real rally begins, with meme coins facing even bigger losses.
Il Capo believes the market isn’t ready for a full-fledged altcoin rally just yet. Based on his analysis, Bitcoin could experience a 15%-20% dip, targeting levels around $80K-$85K. Altcoins, however, are expected to suffer more, with stronger projects correcting by 20%-30% and weaker ones plunging by 30%-40%.
Meme coins, known for their extreme volatility, might see losses as deep as 50%-60%. For example recently, a trader made $28 million on February 14 by trading the “Broccoli” memecoin, inspired by CZ’s dog. Speculation hints at insider trading, exposing memecoins’ risky nature. Analyst Nicolai Sondergaard notes that altcoins are seeing mixed performances, with some sectors outperforming others. This speculation and over hyped coins like TRUMP is creating a problem for established coins.
Despite traders hoping for a smooth ride, Capo warns that markets don’t move based on expectations—they follow their cycle. While painful, this shakeout could be a necessary step before the market enters the next explosive phase.
Historical data suggests that altcoin seasons usually kick off around 6-9 months after Bitcoin reaches its peak. In 2017 and 2021, major altcoin rallies occurred after Bitcoin’s price stabilized post-halving. With the next Bitcoin halving set for April 2024, analysts expect a similar timeline: a strong Bitcoin run through late 2024, followed by a shift into altcoins in early 2025.
Bitcoin dominance, which measures its share of the total crypto market, is another key indicator. When BTC dominance drops below 50%, it signals that capital is moving into altcoins. Currently, BTC dominance is around 60.6%, meaning the transition hasn’t started yet.
For altcoins to take off, a few things need to align. Bitcoin must first peak and enter a stabilization phase, allowing traders to rotate funds into alternative assets. Ethereum is often the first to lead, so an ETH/BTC surge could indicate that the broader market is shifting. Retail hype, particularly around meme coins and emerging narratives, will also play a role in driving prices higher.
While Raoul Pal, CEO of Real Vision said that Altcoin’s can take off soon as the market is heading towards“Banana Zone” which means the altcoin’s can take a lead. But he also warns that investors need patience as it may not be that quick.
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