Bitcoin’s Turning Point: Will Altcoins Seize the Next Liquidity Wave?

Altcoins could rise as Bitcoin consolidates, but over-indebtedness could lead to cascading liquidations.

Earlier this week, Bitcoin rose to an all-time high of $126,000, pushing the collective crypto market cap to around $4.4 trillion. The flagship crypto has since retreated to almost $121,000. New data now suggests that altcoins could rise as Bitcoin consolidates.

But structural vulnerability remains a major risk.

Critical divergence emerges?

According to Altcoin Vector, the market may be approaching a “turning point” for altcoins. The platform noted Historically, ‘Altseason’ begins when the inverse correlation between smaller altcoins (excluding the top 10) and USDT dominance narrows before a liquidity rotation occurs.

That same setup, which led to a major altcoin rally last year, appears to be forming again. Previously, as USDT’s dominance waned and the Alts/BTC ratio rose, liquidity circulated from Bitcoin to Ethereum and then to large-cap altcoins, driving significant gains to the market.

However, Altcoin Vector added that this difference has not yet been confirmed.

Currently, BTC’s dominance is at 60% Point of Control. This level is important because historically it has marked major shifts in capital rotation. At this point, dominance often stabilizes before deciding whether to extend Bitcoin’s lead in the market or convert liquidity into altcoins. Crypto analysis platform ‘Bitcoin Vector’ explained that the current conquest of this zone could be a sign of a maturing Bitcoin phase and a potential turning point ahead.

If BTC maintains its structure while consolidating dominance, altcoins could begin to attract capital. However, Bitcoin Vector warned that altcoins remain structurally vulnerable as over-indebtedness often leads to successive liquidations during Bitcoin retests, such as the recent price surge towards $120,000, events that ultimately cement BTC’s dominance. Liquidity trends are expected to reveal the next phase.

Altcoins ready for recovery in November

Glassnode founders Negentropic to believe that the crypto market appears to be approaching the final volatility-induced shakeout before a major rebound. This means that once this phase is over, Bitcoin could hit a new all-time high, while altcoins are expected to start their recovery as early as next week.

Such a rebound in altcoin activity is expected to gain momentum in November and potentially mark the start of a full-fledged alt season.