When to buy altcoin? The "BUY" signal from the indicator!

* Some famous analysts believe that the altcoin sector is in a ‘buying’ phase for medium term investors at this time.

• The dominance of BTC and USDT does not entirely align with such an optimistic outlook.

At the beginning of 2025, the altcoin sector experienced a continuous sell-off, with top cryptocurrencies like Solana [SOL] and Ethereum [ETH] losing more than 65% of their value. However, this could change soon after an important indicator signaled ‘BUY’.

CryptoQuant analyst, DarkFost has revealed that this could be a good time to gradually enter altcoin positions with a “medium term” outlook. In doing so, he cites the position of aggregate altcoin trading volume.

“We have entered the buy zone, defined by the 30-day moving average falling below the annual average… the last time we reached these levels was in September 2023, right after the bear market ended.”

Source: CryptoQuant

Simply put, the low indicators of this indicator reflect the market conditions being undervalued just before the altcoin sector exploded at the end of 2023.

Therefore, the question arises – do the other momentum signals of altcoins agree with this perspective?

Evaluating Bitcoin Dominance and USDT

Some important indicators for altcoin momentum are the dominance of BTC (BTC.D) and Tether USDT (USDT.D).

During the altcoin boom in November last year, USDT.D decreased, indicating that speculators were converting stablecoins into their favorite altcoin gems. At the same time, this led to a capital rotation from BTC to altcoins, and consequently, BTC.D decreased.

Source: BTC dominance vs Altcoin sector performance, TradingView

However, in 2025, BTC.D increased to 63.5%, indicating that capital had shifted from altcoin to BTC. Additionally, USDT.D rose from 4% to 5.6%, highlighting the caution of traders moving to stablecoin to preserve capital from the downturns in Q1.

Based on the current indicators, it seems that speculators are not very interested in participating in the altcoin space. However, this could change under favorable macro conditions.

Additionally, the RSI heatmap and funding rates have revealed that the altcoin sector is undervalued and has less leverage. This seems to align with the outlook of DarkFost.

Source: Coinglass

By the end of 2024, the funding rate has reached between 50% and 80% (orange), indicating strong bullish sentiment and excessive leverage. This often leads to strong corrections in the case of liquidations. However, at the moment, the funding rate has fallen below 10% in some altcoins, suggesting a stable market that could rise higher under positive catalysts.

It should be noted that some exceptions have outperformed BTC in the past week and 30 trading days. Onyxcoin [XCN] and Fartcoin have increased by over 100% in the past week. Other coins like Curve DAO [CRV] have risen by nearly 50% in the past month.

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