Altcoins Market Faces Major Correction Before US Jobs Data, What’s Next?

Altcoins are facing a sharp drawdown today Ethereum (ETH), XRP, Solana (SOL), Dogecoin (DOGE), Cardano (ADA) correcting over 5%. This selling pressure comes ahead of the release of US jobs data on Friday, which will set the tone for the next market trajectory. Market analysts anticipate further challenges ahead, predicting Bitcoin dominance to reach 71% before the onset of a true altseason.

Will the Brutal Selloff In Altcoins Continue?

Altcoins have been showing major weakness and have been volatile to macro developments. Earlier this week, the broader crypto market came under strong selling pressure following fears of the Trump trade war. Furthermore, the recovery in the past few days has been only partial, considering the magnitude of the fall.

The latest 10x Research report mentions that there’s an inherent weakness in the Bitcoin price movement, which can spill over to altcoins as well. Also, macro developments like the Fed’s decision to delay interest rate cuts and declining US Dollar liquidity have discouraged crypto traders from increasing their exposure in the market and looking forward to more favorable conditions. Furthermore, the report mentions:

“Bitcoin has staged a partial rebound, and Ethereum’s sharp drop was amplified by option gamma hedging and futures liquidations, past large ETH liquidations have not historically led to sustained recoveries. However, weak technical factors suggest further downside risk remains”.

Bitcoin Dominance To First Reach 71%?

Prominent crypto analyst Rekt Capital has highlighted key trends in Bitcoin Dominance (BTC.D), sparking discussion on its future trajectory. Rekt Capital emphasized that historically, whenever Bitcoin Dominance enters the 58-71% macro range, it has consistently revisited the 71% resistance level.

After reaching this 71% peak, the analyst predicts that it would open the gates for an altcoin window. However, the analyst noted that during this period of rising Bitcoin dominance, a strong pullback of 5-10% is possible in altcoins. He noted:

“These Altcoin Windows may progress in line with Altcoin Hype Cycles, whereby increases in Altcoin valuations occur during the second half of respective Quarters It’s just that these Altcoin Windows (i.e. retraces in Bitcoin Dominance) may be 5-10% deep during the macro Bitcoin Dominance uptrend”

After reaching the peak of 71%, Bitcoin’s dominance will decline. This is when the actual altseason will begin,  noted the analyst. As of press time, the Bitcoin price is trading 0.5% down at $97,320 levels with a daily trading volume of around $48 billion.

Market Analysts Remain Optimistic Before US Jobs Data

Despite the recent turbulence in the crypto market, crypto market analysts remain hopeful of an altcoin rally moving ahead. Crypto analyst Titan of Crypto has shared an optimistic update on the altcoin market, highlighting the formation of a significant cup and handle pattern on the charts. “Most aren’t prepared for what’s next,” the analyst stated.

All focus will be on the US jobs data release for the month of January ahead of Friday. If the jobs market continues to remain strong, the inflationary pressure will also continue, giving the Fed little room to announce rate cuts.