The crypto market witnessed a sharp correction this week, with XRP, Dogecoin (DOGE), and Solana (SOL) leading losses among major altcoins. While Bitcoin (BTC) and Ethereum (ETH) posted only mild declines, the altcoin sector saw intensified selling pressure as leveraged positions unwound.
Altcoin Leaders Drop Over 10% From Weekly Highs
In the past 48 hours, XRP fell to $3.14, DOGE to $0.236, and SOL dropped over 12%, following their mid-week highs. From Wednesday’s peak, XRP and DOGE plunged roughly 18%, while SOL slipped nearly 12%, reflecting broad weakness in speculative tokens.
The CoinGlass Altcoin Season Index dropped from 59 to 41, signaling a fading altcoin outperformance trend.
The CoinDesk 80 Index, which tracks mid-cap tokens, declined 10% this week, showing how capital rapidly exited the altcoin market amid rising volatility.
Bitcoin Dominance Breaks Below 200-Day Average: What It Means
A critical development occurred as Bitcoin’s market dominance broke below its 200-day moving average, a level that has historically acted as a key indicator of altcoin cycles.
If BTC dominance remains below this level, it could signal the start of a sustained altcoin season.
This would mean capital is rotating out of Bitcoin and into altcoins, potentially setting the stage for altcoin outperformance, despite the recent dip.
Leverage Liquidations Blamed for Selloff
Analysts pointed to excessive leverage in altcoin derivatives as a key reason behind the pullback. The Altcoin Open-Interest Dominance ratio rose to 1.6, a level historically followed by market corrections.
A reset in leverage levels could stabilize prices and reignite bullish sentiment across smaller tokens.
While BTC held above $116,000, just 3% down from its peak, and ETH remained 4% off highs, the sharp altcoin retreat suggests speculative excess had built up, requiring a healthy market reset.
Conclusion: Altcoin Season Still Possible If Key Trend Holds
Despite the correction, the conditions for a broader altcoin season remain intact if Bitcoin dominance continues to weaken.
Investors should watch for reduced leverage and sustained BTC underperformance to confirm the next leg of altcoin gains.
The next few days will be pivotal in determining whether this is a short-term shakeout or the beginning of a larger cycle in favor of altcoins.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.