On April 14th Bitcoin (BTC) hit an all-time high of $ 64,900 after accumulating a gain of 124.5% in 2021. However, it was followed by a 27.5% correction over the next eleven days, marking a local low of $ 47,000.
The popular one Crypto Fear and Greed Index has hit its lowest point in 12 months on April 25, suggesting investors were closer to “extreme fear” which was a complete reversal from the “extreme greed” seen during the $ 60,000 bitcoin rally.
That April 14-25 downturn wiped $ 200 billion from altcoin market cap. Still, the following recovery could serve as a guide to what to expect when Bitcoin finally manages to break below the $ 40,000 mark.
Altcoins saw a similar trend, hitting a low of $ 850 billion on April 22nd, but fully recovered to a record high of $ 1.34 trillion on May 10th. There is no guarantee that this pattern will repeat itself, but there is no better source of information than the recent market itself.
Cheaper is not always better
Many investors believe that altcoins consistently outperform when bitcoin price rises, but is that the absolute truth?
While it did in 2021, Bitcoin was the clear winner in the final quarter of 2020 as it outperformed the broader market by 110%. However, analyzing the winners of the bull run in late April could provide some interesting insight into what to expect at the next rally.
Among the top 100 tokens is Ether Classic (ETC), Polygon (MATIC), waves, and Fantom (FTM) were the clear winners. The winners were either scaling solutions or smart contract platforms and the industry leader Ether (ETH) also developed better than the market.
80% of the worst performers were coins under $ 1, which is just the opposite of normal investor expectations. There is a persistent myth that cheap altcoins at face value will do great in altcoin rallies, but that clearly wasn’t the case.
The timing of the market is impossible
Unfortunately, there’s no way to predict when the current correction will be over, and altcoins typically don’t stand out during bear trends. This means that calling the “old season” at the first sign of a Bitcoin price recovery that could lead to financial ruin is an imprecise strategy.
A general rule of thumb for starting the “old season” is two or three consecutive days with 30% or more accumulated profits on cryptocurrencies with little to no development, including Dogecoin (DOGE), Litecoin (LTC) and Ether Classic (ETC).
The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement carries risks. You should do your own research when making a decision.