Key Points
Bitcoin’s (BTC) dominance has fallen to 55.81% from its November 2024 peak of 61.53%.
This decline has opened the door for an altcoin season, where over 75% of the top 100 altcoins consistently outperform Bitcoin.
Understanding Bitcoin Dominance
Bitcoin dominance indicates the percentage of the total cryptocurrency market value that Bitcoin holds.
This metric is crucial for traders as it reveals how capital is distributed between Bitcoin and altcoins.
With a dominance of 55.81%, Bitcoin holds over half of the total crypto market value.
The remaining capital is likely shifting towards altcoins.
A decrease in Bitcoin dominance during bull markets often signals higher returns on altcoins.
Therefore, Bitcoin dominance is used to pinpoint altcoin trading opportunities.
When Bitcoin dominance drops abruptly, it signals the start of an altcoin season.
This is a period where over 75% of the top 100 altcoins consistently outperform Bitcoin over a 90-day timeframe.
Traders seize this opportunity by reducing their exposure to Bitcoin and investing in high-liquidity altcoins.
Investing in Altcoins
To take full advantage of the altcoin season, beginners should consider several factors when purchasing an altcoin.
Firstly, the real-world use case of an altcoin is crucial.
Investors should ask questions such as: what is the real-world use case? How does the blockchain technology and the token simplify an existing problem? What is the unique value proposition of the altcoin?
Two altcoins that meet these criteria and rank within the top 100 cryptos by market capitalization are Polygon (MATIC) and Chainlink (LINK).
MATIC is a layer-2 scaling solution that enables faster and cheaper transactions for users while capitalizing on Ethereum (ETH) as the underlying security layer.
Chainlink connects smart contracts with real-world data and is used in traditional and decentralized financial institutions, crypto exchanges, and banks.
Secondly, an altcoin’s market capitalization and liquidity are important.
Large market cap projects like Ethereum and Binance Coin (BNB) are typically considered safer than other altcoins, but their potential for price gains is often low to moderate.
However, mid to small-market cap projects, meme coins on Base, and Ripple (XRP) have a relatively higher potential for gains but come with higher risk.
Thirdly, evaluating the team behind the project and keeping track of ongoing developments are key steps in ensuring the token has a committed team.
Tracking roadmap progress, identifying whether the team is credible within the blockchain community, and following Discord or X commentary on the project are other effective ways.
Lastly, community support and adoption are important.
Altcoins with community support have a relatively higher number of supporters on forums like Reddit, X, or Telegram.
Tracking project partnerships and integrations is another way to identify the token’s relevance and adoption among market participants.
Top 10 Altcoins to Buy in December 2024
The top 10 altcoins for beginners to buy in December 2024 include Solana (SOL), Ethereum (ETH), Aptos (APT), Toncoin (TON), Kaspa (KAS), Injective (INJ), Render (RNDR), Brett (BRETT), Gigachad (GIGA), and Arweave (AR).
Strategic Considerations and Risk
The total crypto market capitalization is a key metric used to determine what to expect from a portfolio that consists of the above 10 altcoins.
Based on projections, the total market capitalization of crypto excluding Bitcoin could surge to $4.47 trillion.
An increase to the projected levels implies a likelihood of 2X gains in the portfolio with the top 10 altcoins listed above.
Factors like the duration of the altcoin season, Bitcoin’s performance, institutional investor interest, and the inflow of capital could influence the market cap.
Traders can expect between 2X and 3X gains this cycle, at the entry points marked in the weekly charts above.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
