**Exploring Dollar-Cost Averaging as 30-Day Altcoin Trading Volume Falls Below Yearly Average: A Potential Opportunity for Accumulation**
As the 30-day trading volume for altcoins dips below its yearly average, experts are suggesting that this could be a prime time for dollar-cost averaging (DCA) strategies. Despite some encouraging metrics, investor caution remains, reminiscent of the slow but eventual altcoin recovery seen in 2023 after extended periods of low trading volume. Recent trade tensions between the U.S. and China have added to the downward pressure on global financial markets, including the cryptocurrency sector. Bitcoin recently fell to $74,000, while many alternative digital assets experienced even sharper declines.
Analysts at ETHNews have noted that the ongoing market pressure might now create favorable conditions for strategic entry points, especially for altcoins. CryptoQuant researcher Darkfost has identified a historical pattern in altcoin trading volumes that often precedes price recoveries. A recent chart comparing the 30-day average trading volumes to yearly averages indicates that the short-term measure has fallen below the long-term trend. This divergence, which was last observed in September 2023, occurred just before altcoins began a significant multi-month rally. Darkfost believes this could signal the start of a buying phase, suggesting it might be time to consider a DCA strategy for altcoins. “We’ve entered a buying 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,” he noted.
The analyst advocates for a dollar-cost averaging approach to altcoin investments, which involves spreading purchases over time to help manage volatility risks. Historical data backs this strategy: after similar volume patterns in late 2023, assets like Solana and Polygon saw gains exceeding 200% within six months. However, current exchange data indicates a more cautious stance among investors, who seem hesitant to increase their holdings despite lower prices. Market reactions to geopolitical events often heighten volatility in smaller cryptocurrencies, and altcoins, which are generally more sensitive to macroeconomic changes than Bitcoin, have struggled in recent weeks.
The recent drop in the 30-day volume indicator below its annual average suggests a decrease in trading activity, which can sometimes align with price floors. Darkfost points out that these periods can last for weeks but have historically rewarded those who are patient in their accumulation efforts. While Bitcoin’s price reflects broader market uncertainty, altcoins are facing dual pressures from macroeconomic factors and investor risk aversion. The volume-based metric provides a data-driven rationale for strategic positioning, although the timing of any potential recovery remains uncertain.
As of now, Bitcoin (BTC) is trading at $83,732, reflecting a 5.27% increase over the last 24 hours. After recently dipping to around $74,000, BTC has shown a strong rebound, suggesting that bullish sentiment is still alive despite recent fluctuations. This price movement indicates a recovery from a corrective phase, influenced by institutional momentum and macroeconomic developments, including regulatory advancements and easing concerns.
