Why This Analyst Says 'It Might Be Time To Start A DCA Strategy On Altcoins'

A CryptoQuant analyst has suggested it might be time for investors to load up on altcoins.
The analyst’s view is based on a key chart.
Other analysts have also expressed similar views, but the tide may not lift all boats.

Over the past few months, the volatility of altcoins, which makes them appealing to investors with high-risk tolerance, has again proven to be a double-edged sword. Amid broader market uncertainty, most altcoins have tanked over 50% from their Q4 2024 highs.

But now, one analyst suggests that a reversal may be on the horizon.

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Altcoins In “A Buying Zone?”

“It might be time to start a DCA strategy on altcoins,” CryptoQuant analyst “Darkfost” asserted in a report on Thursday.

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DCA, short for dollar-cost averaging, is a popular investment strategy where a fixed amount of money is invested at regular intervals regardless of price action. By suggesting that investors start a DCA altcoin strategy, Darkfost is encouraging investors to load up on altcoins in anticipation of a potential rally.

The analyst’s view is based on an intersection of moving averages on the Aggregated Altcoin Trading Volume for Stablecoin Quote Pairs chart, tracking volumes across multiple altcoin pairs.

Darkfost argues that altcoins have recently entered “a buying zone,” as the 30-day moving average on this chart has fallen below the annual average.

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The analyst highlighted that this last occurred in September 2023, before the beginning of the bullish market run that continued in 2024.

“These phases can last several weeks or even months, but historically, they’ve consistently offered attractive opportunities to set up a DCA strategy,” the CryptoQuant analyst stressed.

Darkfost is not the only analyst recently suggesting that an altcoin rally may be on the horizon.

A Selective Rally?

In an April 3 livestream, Real Vision Chief Crypto Analyst Jamie Coutts argued that altcoins still had gas for one more impulsive move in the current market cycle, eying June for the start of such a rally. But Coutts cautioned that the tide would not lift all boats, instead urging investors to look out for assets seeing a bump in network activity.

This view suggests that the coming rally may not be the all-out “altcoin season” that market participants have been pining for since the recent bull run kicked off. It aligns with recent arguments from CryptoQuant CEO Ki Young Ju that the dynamics of crypto altcoin season have changed.

Altcoin season is a bull market phase during which altcoins record substantial price increases, significantly outperforming Bitcoin. It has historically been the result of capital rotation from Bitcoin as investors seek higher beta plays. As such, the historical sign for altcoin season has been a decline in Bitcoin dominance.

But with the emergence of proxies like MicroStrategy MSTR and spot exchange-traded funds, Young Ju contended that the cord between Bitcoin and altcoins has been broken. Further, he argued that the metric to watch was no longer Bitcoin dominance but trading volumes, theorizing that coins that will make it will be the ones with paper wrappers like ETFs or ecosystems based on stablecoins or Bitcoin.

Nonetheless, any potential altcoin rally will likely depend on an improvement in the current macroeconomic conditions, as uncertainty sparked by President Donald Trump’s tariff policy discourages investments in risk assets.

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