Earlier this week, Bitcoin reached a historic high of $126,000, pushing the overall crypto market capitalization to approximately $4.4 trillion. However, it has since dropped back to around $121,000. Current indicators suggest that altcoins may begin to rise as Bitcoin stabilizes, but caution is warranted due to existing risks in the market.

An Inflection Point for Altcoins?

According to Altcoin Vector, the market could be on the brink of a pivotal moment for altcoins. They highlighted that historically, an “Altseason” commences when the inverse relationship between smaller altcoins (those not in the top 10) and USDT dominance increases prior to a liquidity shift. This pattern, which was seen last year leading to a significant altcoin surge, seems to be re-emerging. In previous instances, as USDT dominance decreased and the Alts/BTC ratio increased, liquidity shifted from Bitcoin to Ethereum and subsequently to larger altcoins, resulting in notable market gains.

Nevertheless, Altcoin Vector cautions that this divergence has yet to be officially confirmed.

Currently, Bitcoin’s dominance sits at 60%, a critical level that historically signifies significant shifts in capital flow. At this stage, dominance tends to stabilize, determining whether Bitcoin will maintain its market lead or whether liquidity will transition into altcoins. The crypto analytics firm Bitcoin Vector expressed that this trend may indicate a maturing phase for Bitcoin, signifying an impending turning point.

If Bitcoin maintains its current structure while its dominance consolidates, it could pave the way for altcoins to attract more investment. However, Bitcoin Vector warns that altcoins are in a precarious state, with excessive leverage often resulting in cascading liquidations during Bitcoin’s market corrections, such as the recent dip near $120,000, which ultimately enhances Bitcoin’s dominance. Observations of liquidity trends will be crucial in determining the next market direction.

Outlook for Altcoins in November

The founders of Glassnode, Negentropic, assert that the cryptocurrency market is nearing the final volatile shakeout before a major uptrend occurs. They predict that after this period concludes, Bitcoin may achieve a new all-time high, while altcoins could start their recovery as soon as next week.

This anticipated rebound in altcoin activity is expected to gain traction as we move into November, potentially marking the beginning of a comprehensive altseason.

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