Uncertainty is rife in the altcoin market, with investor sentiment dropping to its lowest level since April. With nearly 90% of altcoins trading below long-term trends, experts suggest now could be a great time to accumulate.
Despite the high level of market uncertainty, the data reveals similarities to when similar conditions led to an altcoin rally. Contrarian investors are considering whether these fear-based lows present a rare opportunity.
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Market downturn or opportunity? Analysts say it’s time to buy altcoins
Altcoin sentiment is near its lowest level, with only 10% of altcoins listed on Binance trading above their 200-day moving average. This pattern is considered a classic indicator of a market downturn and occurs when most investors exit their positions or lose confidence.
Currently, 90% of the altcoin market is trading below this major trend, reflecting widespread apathy among traders and investors.
Cryptocurrency analyst Dirkforst noted that similar setups have occurred three times during the current market cycle, each time resulting in a significant short-term recovery in altcoin prices. These “sold out” zones tend to be the most advantageous entry points for investors willing to wait, he argues.
“The best time to gain exposure to altcoins is often when no one needs them. It is precisely during these periods of indifference that the market tends to offer the best medium-term opportunities,” the analysts wrote.
While there may be opportunities in the current setup, experts cautioned that selectivity remains key. Investors should focus on projects that maintain liquidity and on-chain activity despite the widespread economic downturn.
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“However, it is best not to wait too long in this type of setup as markets tend to normalize as soon as they realize the fear has gone too far,” he added.
Bitcoin’s dominance drops to 59% after “Crypto Black Friday”
Meanwhile, Bitcoin frequently appears in the cryptocurrency market cycle. Absorbing capital amid uncertainty. However, recent data has highlighted a rapid reversal.
The advantage of Bitcoin (Bitcoin’s share in the virtual currency market) is After “Crypto Black Friday”, there was a sharp decline. At the time of writing this article, it was 59.07%.
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Market analyst Crypto Rover noted that a head and shoulders (H&S) pattern is forming on the daily chart of Bitcoin dominance. This is a bearish reversal formation and often signals the end of an uptrend. If confirmed, this pattern suggests that Bitcoin’s market share may continue to decline in the near term.
Such declines typically reflect capital rotation into altcoins as investors seek higher returns in small-cap assets. Historically, similar setups have preceded the start of an “altcoin season” where alternative cryptocurrencies outperform Bitcoin.
Sentiment is extremely low—a contrarian signal?
In addition to technical signals and market trends, a key sentiment indicator, the Crypto Fear and Greed Index, has fallen to its lowest level since April. Participants remain cautious and a mood of indecision prevails following the recent sharp decline.
But Dirkforst sees moments of extreme fear as a sign that the market bottom may be near.
“Each time, the market bottom coincides with this extreme fear zone, reminding us that when the consensus goes one-sided, the market tends to move in the opposite direction. Today we are entering that zone again… act accordingly,” he posted.
Therefore, the current market situation represents a potential turning point for altcoins. Important signs such as Bitcoin’s declining dominance, extreme fear sentiment, and congruence with historical patterns support this outlook. Although risks remain, data suggests the crypto market may be nearing the end of its latest fear-based cycle.
