Altcoins See Massive Discounts After Bitcoin's [BTC] Correction, But Is It Time to Buy the Dip?

Altcoins are in massive discounts after the recent market sell-off following Bitcoin's [BTC] correction.

Recent market sell-offs following Bitcoin’s [BTC] correction have left altcoins trading at massive discounts.

This has prompted some analysts to advise “buying the dip.” However, on-chain analyst and Alphractal founder Joao Wedson has issued a stark warning to altcoin traders.

“The best strategy is to stay in Stablecoins, not BTC or any Altcoins,” Wedson stated. “The recent performance and dominance trends aren’t favorable. The ideal exit was when BTC was above $106k —time to exit everything!”

According to Wedson, an uptick in Bitcoin vs. altcoin positioning indicated that more capital flowed from altcoins to BTC and stablecoins.

Is it time to buy altcoins?

Wedson observed that BTC dominance marked a bottom above 54%, which could strengthen over the next few weeks and months. He projected this scenario as “terrible for altcoins.”

Moreover, the analyst highlighted that BTC dominance 90-day change turning positive for the first time since the wild altcoin rally in November worsened the situation for altcoins.

To summarize, the altcoin sector may not experience a strong rebound from the recent correction. Most of the top and mid-cap altcoins were down 10%-30% in the past week.

Among the top altcoins, Ripple [XRP] and Cardano [ADA] saw significant dumps. XRP was down nearly 10% but remained above $2. On the other hand, ADA dropped 18% and slipped below $1 during the same period.

Interestingly, Ethereum [ETH] held the dump much better, dropping only 6% but defending $3.5K as support.

However, other outliers like Hyperliquid [HYPE] and Pudgy Penguins [PENGU] rallied 40% and 425%, respectively.

Despite these outliers, the overall altcoin sector performance slowed even further, with the Altcoin Season Index dropping to a monthly low of 50%.

While the data leaned toward bears, the anticipated ‘Santa rally’ could boost altcoins’ prospects. Additionally, a potential strong rebound in 2025 could renew market interest in altcoins.