The Altcoin Market Evolution

The altcoin market has evolved significantly, with big wallets making strategic moves to fuel their growth. As this space expands, the question arises: which altcoins should you target?

Between late November and early December, Bitcoin’s (BTC) dominance plunged from 61% to 54%, coinciding with its record-breaking $99K close. This sharp shift signaled a local top, as investors either flocked to alternative assets or exited the market entirely. In this chaos, many altcoins seized the chance to shine.

Big names like Ripple (XRP), Ethereum (ETH), Cardano (ADA), and Binance Coin (BNB) capitalized on the moment. However, the standout was Tron (TRX), which recorded the longest green candlestick in its history, surging an astounding 96% in one day.

With BTC currently in the spotlight and hitting new all-time highs, market volatility persists. The unpredictability of BTC’s price action leaves no clear indication of its next direction. As the market prepares for the next local top, investors must consider which altcoins to watch, potentially capitalizing on dips.

The New Year: Demand for Greater Diversification

The crypto market is on the move again. In the past 24 hours, Bitcoin has surged, pushing its price higher and erasing $118 million in short positions. Bitcoin’s market share is now at 57%, indicating a gradual reclaiming of its dominance. However, with volatility continuing, it’s the perfect time for altcoins to shine.

As the market matures, risk management becomes essential. Locking in profits and avoiding overexposure means focusing on altcoins. In the coming year, diversification will be crucial. Your risk appetite will be tested, emphasizing the need for a balanced approach.

This diversification strategy can be seen with whales on the Tron network. As Bitcoin’s value increased over the years, altcoins like Tron gained attention. What began as small wallet holdings has now grown into massive holdings, with these whales controlling nearly 70% of the total supply.

This trend isn’t exclusive to Tron—most leading altcoins are experiencing similar phenomena, with only a few exceptions.

Eyeing Potential Altcoins

Timing is paramount in crypto. Currently, many altcoins are quietly accumulating and building momentum against Bitcoin. Historically, when BTC hits a local top, altcoins often break out, making “buying the dip” a strategy likely to yield substantial long-term gains.

However, be prepared for volatility. The market can experience corrections akin to those seen previously. For instance, LINK experienced over 15 corrections in under a year during 2020-2021. While it currently sits at $29 (the same price as two years ago), 84% of LINK holders remain profitable, with nearly half its supply held by just 18 whale wallets.

Interesting dynamics arise with whales stabilizing some altcoins while also causing significant price swings. With a small number of wallets controlling so much supply, they can manipulate market movements.

What’s the optimal strategy moving forward? Focus on low and mid-cap tokens with less whale influence.

As Bitcoin continues to make its moves, volatility is expected to rise. Diversifying into smaller, less-concentrated tokens could offer the best way to protect your portfolio while still capitalizing on gains from top altcoins.