Altcoins Enter Recovery Phase as Bitcoin Dominance Declines; Is This the Cycle Bottom?

Altcoins are recovering from Monday's market-wide selloffs creating positivity among investors. Solana (SOL) is not left out in the recovery phase, as the coin has gained 10% in the last 24 hours.

Others, like Dogecoin (DOGE), Cardano (ADA), and Toncoin (TON), have rallied significantly in the last 24 hours. DOGE has gained over 8%, TON is up by over 9%, and ADA has rallied nearly 6%.

Meanwhile, Bitcoin fell below $59,000 earlier today before rallying above $61,000. Bitcoin's dominance is declining as the altcoins begin to record strong gains. Although altcoin prices normally correlate with Bitcoin's, they seem to deviate today based on current performance.

Analysts Reveal Altcoins Potential Rally Despite Market Slump

According to analyst Dami-Defi, Bitcoin is dumping while altcoins are pumping. He noted that Bitcoin's declining dominance implies liquidity is flowing into altcoins. He also explained that the Total 3 Index, excluding Bitcoin and Ethereum, has found strong support levels.

The Total 3 Index shows the total market capitalization for the top 125 cryptocurrencies but does not include Bitcoin or Ethereum. This Index displays a possible bullish reversal ahead of the ongoing bearish trend.

Meanwhile, Bitcoin's dominance has dropped by 2% within 24 hours, hinting at a possible altcoin season.

Similarly, crypto analyst Michael van de Poppe identified a pattern where altcoins follow the BTC downtrend but recover when Bitcoin hits the bottom. Poppe noted that Bitcoin pairs often signal a price bottom before USDT pairs. So, he believes that multiple signals reveal that a reversal might be close.

Poppe claims that the altcoins are now showing strength, with some up by 10% against Bitcoin. He identified LINK as an altcoin that has also hit its price bottom. Hence, Poppe predicts that the second half of this year will be better for most cryptocurrencies.

Analyst Van de Poppe Predicts Capital Rotation

Last week, Michael van de Poppe noted that the altcoin sentiment is terrible, and the BTC valuations of all altcoins are hitting new lows. However, he recalls that the last time such price movements occurred, SOL rallied by 500%, FET by 650%, and RNDR by 300%.

Based on their current performance, the analyst is quite optimistic about a recovery rally ahead for the altcoins. He focused on Mt. Gox'splanned release of BTC tokens into the market in July and its perceived bearish effects. However, Van de Poppe does not believe the Mt.Gox release will cause further decline; rather, he expects a reversal.

He highlighted that Ethereum ETFs will strengthen the entire crypto market. Poppe says he foresees outflows of funds from Bitcoin and Solana into the Ethereum ecosystem once the ETFs launch.

Further, he noted that when Bitcoin declines, altcoins follow but make a strong recovery once BTC hits a price bottom. Based on his observation, Van de Poppe does not believe that altcoins are still in a bear market.

BTC is down 15% from its all-time high value, and Ethereum shows a similar slight decline. However, the altcoins are positioned to rally as Bitcoin approaches its price cycle bottom, which Van de Poppe believes is close.

If these predictions hold, the altcoins could enjoy a positive performance in the coming weeks.

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