Investors were shaken on Friday after fresh US tariff news hit the markets. This trade-related scare pushed several leading altcoins into a downward spiral, some suffering double-digit losses in mere hours.
While the prices have since rebounded, altcoins are still experiencing extreme market fear. This scenario, however, can actually create one of the most opportune times for investment.
Perfect Time to Buy?
In its latest analysis, CryptoQuant explained that when most traders are turning away, prices often dip to levels that reward those willing to act against the existing sentiment. In other words, market disinterest can signal attractive medium-term buying opportunities.
A reliable method to assess these phases is by looking at the 200-day moving average (200 DMA). Currently, just 10% of altcoins listed on Binance are above this threshold, meaning a whopping 90% are trading below their long-term trend. This indicates that the market is in a phase of broad capitulation.
In previous instances, each time this extreme setup has occurred in the current cycle, the altcoin market experienced significant short-term rebounds. Such phases of selling exhaustion provide a lucrative entry point for investors who can exercise patience.
For those considering a strategic entry, CryptoQuant stated that the focus should be on projects that have maintained strong liquidity and on-chain activity even during the downturn.
“But it’s best not to wait too long, as this type of setup tends to normalize quickly once the market realizes it’s gone too far in fear.”
Don’t Chase Every Dip
Alphractal founder and popular crypto analyst Joao Wedson said that altcoins could steal the spotlight amid a quiet market. He noted that some signals haven’t yet triggered a buy on daily charts, indicating BTC is still holding back. Wedson expects a few dull days ahead, which could reset expectations. But during this lull, he added that certain altcoins may emerge as notable performers.
But not everyone is confident. Crypto analyst Ted Pillows is ringing the alarm bell for altcoin hype. The altcoin market cap, excluding stablecoins, still sits 20% below its peak. This makes an “Altseason” a distant dream. In his latest analysis, Pillows warned traders not to chase every dip. He instead said that Bitcoin and Ethereum need to show real strength before altcoins can ride a meaningful wave.