Altcoins May Be Poised for a Major Comeback After Historic Liquidations

What many feared was the start of a prolonged downturn is now being described as a potential reset moment – one that often precedes major uptrends in digital assets.

A Pattern Hidden in the Chaos

Market researcher Bull Theory argued that these violent corrections are a recurring feature of every crypto cycle rather than a signal of collapse. The analyst compared the recent wipeout to the March 2020 pandemic crash and the May 2021 slump – both of which saw the market rebound dramatically within months. “Each steep decline felt like the end of the cycle, yet every one marked the beginning of a major recovery,” they explained.

Altcoins endured the worst of the selloff as leverage evaporated across exchanges. Tokens such as Solana, Dogecoin, Cardano, Chainlink, and XRP plunged between 18% and 30% within 24 hours. Still, some analysts believe the pullback could ignite a new rotation into smaller-cap assets once selling pressure fades.

Trader Ash Crypto recalled that after the 2020 crash, altcoins skyrocketed as market sentiment flipped from fear to greed. “We saw projects gain 25x to 100x back then – a reminder that deep corrections often plant the seeds for future rallies,” he said.

Technical Signals Flashing Familiar Signs

Momentum indicators are starting to echo previous bull cycle recoveries. Analyst Merlijn The Trader pointed to a developing bullish MACD crossover on Bitcoin’s ratio chart against altcoins – a signal that also appeared ahead of major surges in both 2017 and 2021. If history rhymes, the setup could be the technical confirmation traders have been waiting for.

Despite the turbulence, some metrics hint that the market is already stabilizing. Total capitalization briefly slipped below $4 trillion before steadying, while Bitcoin dominance – a key barometer of altcoin strength – has dipped under 59% for the first time in over a month. That decline often precedes phases where capital rotates from Bitcoin into higher-risk tokens.

If analysts are right, the recent chaos could soon give way to a broad-based recovery – one that marks the start of a new chapter for speculative altcoins and the third major “altseason” in crypto’s history.