Bitcoin Faces Resistance While Altcoin Market Gains Interest

Bitcoin is encountering resistance on its path to the $100,000 target, leading to a potential consolidation phase. This scenario has reignited interest in the altcoin market. In 2021, altcoins provided significant gains to traders when Bitcoin’s rally paused, and a similar pattern may be emerging this cycle.

As traders anticipate another potential breakout, we analyze key altcoins that could rally if Bitcoin consolidates. This detailed analysis covers five altcoins from the 2021 bull run that are showing signs of gearing up for a significant move this cycle.

Bitcoin Dominance Declines, Altcoin Gains Likely

Bitcoin’s dominance peaked at 61.53% on November 18, the highest level since 2021. However, this dominance has since decreased to 58.97% as of November 26, 2024.

A reduction in Bitcoin dominance often leads to capital rotation into altcoins, potentially sparking an altcoin season where at least 75% of tokens outperform Bitcoin over a 90-day period.

During the 2021 bull run, Bitcoin dominance fell to 40%, which triggered a rally in altcoins, resulting in substantial gains for traders. A similar trend could boost altcoin prices in the current bull run.

Is It Altcoin Season?

The altcoin season index shows a steady increase, indicating a potential shift towards an alt season. When 75% of the top 50 altcoins outperform Bitcoin in a 90-day timeframe, it signifies an alt season, excluding stablecoins like Tether, DAI, and asset-backed tokens such as WBTC, stETH, and cLINK.

The index has risen from 6 on November 5 to 57 currently. Once this metric reaches 75, it will indicate an “altcoin month,” and if sustained over a 90-day period, it will confirm an altcoin season.

While it isn’t altcoin season yet, the steady progress suggests traders should start preparing by adding relevant altcoins to their portfolios to capitalize on potential profits in the coming weeks.

Altcoins from the 2021 Bull Run Eye Massive Gains

Altcoins like Avalanche (AVAX), Polkadot (DOT), Fantom (FTM), Internet Computer Protocol (ICP), and the Sui Protocol (SUI) showed significant gains during the 2021 bull run and might make a comeback this cycle. Technical and on-chain indicators support the potential resurgence of these assets.

Total open interest in USD is a metric used to identify the value of all open contracts across derivatives exchanges for a given token. For AVAX, DOT, FTM, ICP, and SUI, open interest spiked on November 22 and has remained above average since then, according to Santiment data.

Trading volume and address activity for these assets remain close to or above average levels, indicating increased interest from crypto traders.

In the past week, AVAX gained nearly 20%, DOT added 33%, FTM rallied 44%, ICP increased by 18%, while SUI saw an 8% decline. These tokens were relevant in the 2021 cycle for their utility, partnerships, and ecosystem value addition for traders.

Alongside the meme coin narrative, utility and real-world asset tokenization, Ethereum-alternative chains have gained traction this cycle, making Avalanche, Polkadot, Fantom, and Sui Protocol relevant for traders.

Top 5 Altcoin Targets This Cycle

Avalanche (AVAX): Avalanche’s daily price chart indicates that the altcoin could extend its gains by 55% to revisit its March 2024 peak, targeting the $80 level. The relative strength index (RSI) reads 69, close to the overvalued zone above 70. The moving average convergence divergence (MACD) shows green histogram bars above the neutral line, supporting further gains for AVAX.

Fantom (FTM): Fantom could rally 16% in the coming weeks to revisit its March 2024 peak of $1.2292. The March 2022 peak of $1.6817 is the target for Fantom. The MACD suggests further gains are likely, with the three exponential moving averages (EMAs) acting as key support levels for FTM.

Sui Protocol (SUI): Sui Protocol’s token trades at $3.4350 and could revisit its 2024 peak at $3.9409. The token is trading above its three EMAs, with the 50-day EMA at $2.6631 acting as a key support level. SUI could rally 15.26%, with an upward sloping RSI supporting the bullish outlook.

Internet Computer Protocol (ICP): ICP ended its multi-month downtrend on November 22 and could retest its 2024 peak at $20.9850. Along the way, ICP faces resistance at the 50%, 38.2%, and 23.6% Fibonacci retracement levels at $13.3870, $15.1800, and $17.3990, respectively. The MACD supports a bullish thesis for ICP, with $9.4790 serving as a key support level in case of a correction.

Polkadot (DOT): Polkadot could extend its gains by 50% if the token resurges in the upcoming altcoin seasons. DOT could face resistance at $10.50 and potentially break past this level to target $11.8890, marking nearly a 51% gain from the current price level. The March 2022 peak of $23.850 is the ultimate target for DOT, with $4.7040 acting as a support level. The MACD supports a bullish outlook for Polkadot, despite a recent decline in the 7-day timeframe, suggesting a recovery is likely in the short term.

Traders should consider that a resurgence in altcoin prices depends on Bitcoin’s dwindling dominance and capital rotation from BTC to altcoins. If Bitcoin surpasses $100,000 on the daily timeframe and continues to climb, the altcoin season could be delayed or pushed to early 2025.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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