Altcoin Market Poised for Rebound: Key Indicator Signals a ‘BUY’

Solana and Ethereum Take a Hit: Altcoin Market Showing Early Signs of Recovery

The altcoin market endured a sustained sell-off in early 2025, with major cryptocurrencies like Solana (SOL) and Ethereum (ETH) losing over 65% of their value. However, recent data suggests that the market might be at a turning point. According to CryptoQuant analyst DarkFost, this could be an ideal time to start positioning for the mid-term, given the behavior of key market indicators.

Key Indicator Shows ‘BUY’ Signal for Altcoins

DarkFost pointed out that altcoin trading volume positioning has entered what he calls a “buying zone.” This is defined by the 30-day moving average falling below the annual average, a condition last seen in September 2023. This period was immediately after the bear market ended, and the sector saw a dramatic rebound. The analyst suggests that this signal mirrors undervalued market conditions, which could lead to the next major altcoin surge.

Dominance Metrics: BTC and USDT’s Impact

Key dominance metrics for Bitcoin (BTC) and Tether (USDT) help assess altcoin momentum. In late 2024, as altcoins surged, USDT dominance (USDT.D) fell, signaling traders’ shift from stablecoins to altcoins. However, in early 2025, BTC dominance (BTC.D) climbed to 63.5%, while USDT.D increased from 4% to 5.6%, indicating a cautious stance from traders amidst market uncertainties.

Undervalued Altcoin Sector

Despite a slowdown in altcoin momentum, the RSI heatmap and funding rates suggest the sector is currently undervalued and has minimal leverage. In fact, funding rates for several altcoins are below 10%, a sign of a stable market that could potentially rally with the right catalysts.

Outliers Defying the Trend

Notably, some altcoins have already outperformed Bitcoin in recent weeks. Onyxcoin (XCN) and Fartcoin saw gains of over 100% in the past week, while Curve DAO (CRV) surged nearly 50% over the past month, showcasing the potential of select altcoins despite overall market conditions.

As the altcoin sector adjusts to these indicators, investors may soon see a shift in momentum if macroeconomic conditions turn favorable.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.