Main Points :
- Bitcoin surpasses $65,000, raising expectations for a bullish Q4 in the cryptocurrency market.
- Fear of missing out (FOMO) in the altcoin market grows as Bitcoin strengthens.
- Bitcoin dominance drops, while several altcoins experience significant price gains.
- Federal Reserve’s rate cuts support altcoin interest, especially high-beta assets.
- Analysts predict this is only the beginning of a strong altcoin season.
Bitcoin’s Surge to $65,000 and Q4 Bullish Momentum
Bitcoin’s recent recovery, surpassing the $65,000 mark, has sparked optimism among cryptocurrency analysts for a bullish fourth quarter. According to Marcus Thielen, Head of Research at 10x Research, the possibility of further gains is highly likely, with profits expected to be realized earlier than anticipated. His comments came in a report on September 27, where he expressed a strong outlook for the remainder of the year.
Thielen noted that this price milestone for Bitcoin has renewed fear of missing out (FOMO) in the altcoin market. He pointed out that the market could see broader FOMO-driven growth, hinting at a significant rally across the cryptocurrency space.
At the time of writing, Bitcoin is trading at $65,424, up 3.04% over the past seven days, according to CoinMarketCap. Analysts view this as a critical level, suggesting further upward momentum as we enter the final quarter of 2024.
Altcoin Market Shows Signs of Growing FOMO
Bitcoin’s strength has fueled speculation that the altcoin market is entering a new phase of FOMO, with investors eager to capitalize on potentially higher returns from smaller cryptocurrencies. Thielen emphasized that several altcoins are already beginning to experience large gains, driven by increased market speculation.
Recent data from Capriole Investments shows that the Altcoin Speculation Index has risen to 23%, marking a 13% increase over the past 30 days. This index tracks the percentage of altcoins that outperform Bitcoin over a 90-day period, and a higher number suggests growing speculation in the market.
Among the top performers in the last week, Sei (SEI) has risen 37.79%, making it the best-performing cryptocurrency in the top 100 by market capitalization. This was followed by Wormhole (W), which saw a 32.83% increase, and Shiba Inu (SHIB), up 32.08%. Thielen also mentioned Shiba Inu’s rising popularity among retail investors in South Korea, noting that it has once again become the top-traded asset in the country.
Decline in Bitcoin Dominance Amid Altcoin Surge
As the altcoin market picks up steam, Bitcoin’s dominance in the cryptocurrency market has slightly decreased. Since September 20, Bitcoin’s dominance has dropped by approximately 1.57%, reaching 57.51%. This figure is commonly used by traders to evaluate the flow of capital between Bitcoin and altcoins. A lower dominance often indicates that investors are diversifying into other cryptocurrencies, hoping to achieve higher returns in the short term.
Simultaneously, the Crypto Fear & Greed Index has climbed 11 points since September 26, reaching a score of 61, which falls into the “Greed” category. This index is often used to gauge market sentiment, and a higher score suggests increasing bullishness and risk-taking behavior among investors.
The Federal Reserve’s Rate Cuts Boost Altcoin Appeal
One of the key factors contributing to the altcoin market’s recent surge is the Federal Reserve’s decision to cut interest rates. On September 18, the Federal Reserve reduced rates by 50 basis points, which is seen as a bullish signal for risk assets, including cryptocurrencies. Thielen mentioned that, as long as the Federal Reserve remains open to further rate cuts, high-beta assets such as altcoins are likely to continue gaining momentum.
Interest rate reductions make traditional investments like bonds and fixed deposits less attractive, leading investors to seek higher returns in riskier assets like cryptocurrencies. Several cryptocurrency analysts on social media have pointed out that this could be the start of a significant bull run in the altcoin market, predicting substantial gains over the coming months.
Analysts Predict This is Only the Beginning
Noted cryptocurrency analysts are bullish on the altcoin market’s outlook, predicting that the current gains are only a precursor to what lies ahead. Michael van de Poppe, founder of MN Trading, commented on X (formerly Twitter) that while altcoins are waking up, this is just the beginning compared to what will unfold over the next six months. He added that the gains would likely be extraordinary as the market enters a new cycle of growth.
Similarly, analyst Joe McCann pointed out that 90% of all altcoins listed on Binance are now trading above their 50-day moving average. This technical indicator suggests that altcoins are breaking out of their recent downtrends and positioning for a more sustained rally. Miles Deutscher, another prominent analyst, echoed these sentiments, emphasizing that altcoins appear ready to shake off months of underperformance.
A Bullish Outlook for Bitcoin and Altcoins
The surge in Bitcoin’s price past $65,000 has reignited bullish sentiment across the cryptocurrency market, with analysts expecting a strong Q4 ahead. Altcoins are seeing increased investor interest, especially as capital shifts from Bitcoin to smaller, high-beta assets. The Federal Reserve’s recent rate cuts have further supported risk-taking behavior, setting the stage for a broader altcoin rally.
As FOMO continues to drive the market, analysts remain optimistic that the gains we’ve seen so far are only the beginning of a more significant bull run. Investors should keep a close eye on the altcoin market and be prepared for substantial shifts in the months ahead.