Is Bitcoin in the First Phase of a Bull Market? Are Buying Opportunities Still Available on Dips?
The blockchain analytics platform CryptoQuant forecasts that the current Bitcoin bull market is still in its early stages, claiming that entering the market and buying the dip still makes sense despite recent significant price increases.
Bitcoin rose by 34% in November, reaching an all-time high of $99,655.50; however, investors have yet to witness the explosive price movements and peak euphoria typical of a crypto bull rally. CryptoQuant's Bitcoin Bull-Bear Market Cycle Indicator shows that the market has not yet reached the "Extreme Bull" phase. According to the platform, it makes sense to enter the market during pullbacks that are common in bull markets. For instance, the 2017 bull run was characterized by a drop of 22%, while 2021 saw declines of 10% and 30%.
Similarly, the 2024 market cycle experienced pullbacks of 15% and 20%. This suggests that investors can benefit from future declines, as these points may offer good entry opportunities. CryptoQuant also shared the prediction that rising prices are pushing investors toward speculative moves, after which the market tends to present solid buying opportunities.
Hopes for an altcoin season remain Recently, altcoin price movements have contrasted with Bitcoin's steady rise. While Bitcoin has increased by over 61% in the last three months, many altcoins have recorded gains of less than 30% during the same period. Specifically, Tron (TRX) increased by just 25%, while Toncoin rose by 15%.
In contrast, some altcoins have also shown impressive gains. Over the last three months, Stellar (XLM) surged by 420%, while Cardano (ADA) climbed by 142%. This mixed performance among altcoins has raised concerns among market participants. Analysts attributed the delay in the anticipated altcoin rally to Bitcoin's market dominance and the influence of institutional capital.
Bitcoin demand is now primarily driven by institutional investors and spot exchange-traded funds (ETFs). Unlike traditional stock market users, these institutional entities rarely convert their Bitcoin holdings into altcoins, which affects market liquidity.
A drop in Bitcoin's dominance could trigger altcoin season Market analysts continue to examine historical data to predict the onset of altcoin season. TechDev noted that capital tends to flow into altcoins when Bitcoin's dominance reaches a certain threshold, while Rekt Capital emphasized that Bitcoin's recent decline to around 57% dominance has created an opportunity for altcoin demand.
If this dominance continues to fall, significant technical indicators may create more opportunities for altcoin breakouts. However, Bitcoin is likely to regain dominance after major altcoin rallies.