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Market Crash Clears Path for Altseason 3.0: What Traders Need to Know
Altseason 3.0 Incoming? Following a massive weekend leverage flushout that wiped billions from the cryptocurrency markets, analysts are now speculating that this could mark the groundwork for the much-anticipated “altseason 3.0.”
Historical Market Resets Pave the Way for Major Bull Runs
Crypto researcher and analyst “Bull Theory” highlights that every major crypto expansion has been preceded by significant market corrections ranging from 30% to 60%. For example, during the March 2020 pandemic crash, markets plummeted nearly 70%, while in May 2021, they experienced a 50%+ correction. Several other 30% to 40% altcoin slumps have also marked previous bull market cycles.
Despite the sharp downturn in April 2024, often seen as a potential bear market start, Bull Theory points out that each major wipeout has historically been followed by some of the strongest rallies of the cycle — fueling optimism for what’s next.
Altcoins Take the Hardest Hit but Show Signs of Bounce Back
Altcoins traditionally suffer the brunt during these resets. This past weekend was no exception, with XRP dropping 18%, Solana (SOL) down 22%, Dogecoin (DOGE) falling 28%, Cardano (ADA) down 25%, and Chainlink (LINK) shedding 26% in just 24 hours.
Yet, optimism remains high. Analyst Ash Crypto recalls the massive altseason following the March 2020 crash, where altcoins surged 25x to 100x, and believes history may repeat itself. Supporting this, analyst Merlijn The Trader points to a monthly bullish MACD crossover on the BTC/altcoin chart, a pattern previously seen during altseasons in 2017 and 2021 — hinting at the potential rise of altseason 3.0.
Market Cap Dips Below $4 Trillion Amid Mixed Signals
Despite this bullish outlook, the total crypto market cap dropped below the psychological $4 trillion threshold on Tuesday. Meanwhile, Bitcoin (BTC) led the day’s losses with a 1.4% decline, falling under $113,500. Interestingly, some altcoins posted daily gains during the same period.
Additionally, Bitcoin dominance — a key indicator for altcoin performance — recorded its first red weekly candle in five weeks, slipping below 59%. This shift could be a crucial signal for traders eyeing the next phase in the market cycle.
