Altcoins
Altcoins vs Bitcoin? Altcoin Season Potential Analysis
Altcoin prices have dropped 30% to 70% in recent months, leading analysts to rule out the possibility of an altcoin season. But when armed with new information, BeInCrypto finds that may be about to change.
This analysis sheds light on the logic behind this thinking, while offering insights into potential catalysts.
It’s still early, but the signs have already appeared
Altcoin season is a market phase where cryptocurrencies other than Bitcoin (BTC) are seeing a steady increase in value, while also overtaking the number one coin.
One of the indicators that validate this period is TOTAL2, which is the total market capitalization of cryptocurrencies, excluding BTC. When this market capitalization increases, it gives credence to the potential increase in altcoin prices.
However, a decrease implies that Bitcoin is dominating the marketAt press time, the total altcoin market cap is $940.37 billion, up 4.87% over the past 24 hours. The same market cap had initially dropped 23.26% between June 6 and July 8.
To know more: What are the best Altcoins to invest in July 2024
Daily chart of cryptocurrency market capitalization excluding BTC. Source: Trading View
If the indicator continues to rise, the altcoin season will be closer. The last time this happened was in February-March. At that time, the value of TOTAL2 went from $753.83 billion to $1.24 trillion in a month.
Following the recent shift, X analysts seem to be shifting their stance, favoring the dominance of altcoins. One of them is Michaël van de Poppe, founder of MN Trading.
“Altcoin market cap has reached a crucial support level for a higher timeframe and is finding support here. It is still early in the week, but if this week continues with this uptrend, then the signs will start to improve.” van de Poppe expressed his opinion on X.
Bitcoin’s Dominance Takes a Step Back, Could Open the Doors for Altcoins
In addition to opinions, another factor that determines whether it is time for altcoins to shine is Bitcoin dominance. For the cycle to be validated, BTC.D must decline.
Using the weekly chart, we see that BTC.D has fallen from 62.69% in March 2021 to 40.89% in May of the same year. History shows that this was around the same time many altcoins hit their all-time highs in the last bull market.
This week, dominance dropped from 55.04% to 54.68%, indicating that some altcoins have started to outperform BTC.
Because of this mirror Based on the performance shown in 2021, at least 75% of the top 50 altcoins must be outperforming Bitcoin.
According to Blockchaincenter data, only some cryptocurrencies, including meme coinsthey did. Among them are Toncoin (TON), Pepe (PEPE), Kaspa (KAS) and Bonk (BONK).
As a result, the 90-day Altcoin Season Index remains at 29. However, this is an improvement from the reading a few days ago, when it was at 25.
If the index continues to reach higher values, altcoins will be closer to retesting their all-time highs, putting BTC in difficulty in the process.
To know more: What Are Altcoins? A Guide to Alternative Cryptocurrencies
Ethereum, Solana’s role is crucial
Furthermore, it is important to remember that Ethereum (ETH) has always acted as a catalyst for the dominance of altcoins.
In recent months, ETH has underperformed BTC. However, the Ethereum Spot ETF Approval Coming Soon could lead to a significant increase in the value of ETH.
If so, other altcoins could join the potential rally. In the case of Capo of Crypto, the update on ETH ETFs, as well as official applications for Solana VanEck and 21Shares ETFs are the reason the analyst is bullish on altcoins.
“The German government’s selling pressure is being absorbed. All Ethereum ETF spot applicants have filed updated S-1s. VanEck and 21Shares have officially filed 19b-4s for the Solana ETF spot. I am bullish on the coming weeks, especially on altcoins.” Head of Crypto he wrote.
Based on the above analysis and market sentiment, altcoins look set for a major pump. However, traders need to keep their eyes open.
If selling pressure hits the market again, the rally could be invalidated. Furthermore, if Ethereum does not receive impressive inflows into ETFs, cryptocurrencies could struggle to rally.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto strives to provide accurate and unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult a professional before making any financial decisions. Please note that our Terms and conditions, Privacy PolicyAND Disclaimers They have been updated.