Bitcoin (BTC) Reclaims Dominance but Altcoins Steal the Show, Time to Buy the Altcoin Dip?

Bitcoin's recent pullback has opened the door for altcoins to surge. As BTC takes a breather, altcoins are racking up impressive double-digit gains.

Bitcoin’s recent setback has paved the way for altcoins to soar. As BTC takes a breather, altcoins are notching up double-digit gains. This surge in altcoin demand is a clear indication that investors are seizing the opportunity to diversify their portfolios and recoup losses.

Retail buyers usually strategize around Bitcoin’s peak, viewing it as the ideal time to shift capital into the altcoin market. But if the market’s current shift suggests BTC might be nearing a local top, could this be the sweet spot to scoop up altcoins on the ‘dip’?

Bitcoin is reclaiming its dominance but there’s a catch

Currently, all eyes are on Bitcoin. After bouncing back from the chaos post-FOMC, BTC is inching closer to the $100K mark, trading at $97K (at the time of writing).

However, don’t expect a smooth ride – challenges still lie ahead. While Bitcoin dominance has climbed to 59%, that doesn’t guarantee a bullish run. On the psychological front, BTC still faces hurdles.

For one, the greed index has slipped back to early November levels. A small pullback could push it into the “fear” zone, signaling caution among traders – a logical move after the recent dump.

Secondly, short-sellers are reaping rewards by betting against BTC, a strategy as rewarding as buying at the bottom and selling at the top of the cycle.

These factors combined suggest that while BTC’s current price may look inviting, the cautious mood among investors points to a likely consolidation phase ahead.

Meanwhile, the altcoin market has been flourishing in Bitcoin’s recovery, leading the charge in the top gainers’ chart. If this trend continues, most altcoins could be up for a massive leg-up.

So, time to dig into the altcoin dip?

The next few days will be crucial in determining whether the altcoin market is really seeing an influx of fresh capital.

Recent activity shows big players scooping up major names – a classic indication of a bottom forming – but a strong rebound may still be premature.

Why? For one, Bitcoin is still in the early stages of recovery. As highlighted earlier, the distinction between “consolidation” and “correction” remains razor-thin, keeping the market on edge.

Even more telling is the ETH/BTC correlation chart below, which hints at further downside unless the RSI reaches historical lows. This uncertainty might keep altcoin investors cautious, at least for the present.

A smarter move could be to focus on low to mid-cap altcoins for quicker returns, given the current market dynamics.

Read Bitcoin’s [BTC] Price Prediction 2024-25

Top-tier altcoins, however, are still closely linked to Bitcoin’s price action and remain riskier bets – especially until Bitcoin shows clearer signs of consolidation or an overheated market.

Moreover, with whales accumulating top altcoins, these coins could become more susceptible to manipulation. Staying agile could be key to seizing opportunities, which, for now, may lie in low-cap gems.