Altcoins are currently experiencing a breakout in the crypto market, suggesting a potential shift towards an altcoin-dominated phase. Market analysts have noted that the total market capitalization of altcoins is on the rise, breaking out of longstanding downward trends. While it remains uncertain if a full-blown altcoin season has arrived, the current developments are seen as a promising start.
Analysts have observed that altcoins measured through TradingView indexes like TOTAL.3 and OTHERS have surpassed significant moving averages, particularly the 100-day and 200-day exponential moving averages (EMAs). This breakout is reminiscent of a similar trend in July 2023, where altcoins used these EMAs as dynamic support to achieve higher highs. Monitoring daily closes is essential to confirm this positive trend.
The cyclical nature of the crypto market suggests that altcoins usually follow Bitcoin’s bullish momentum. Historically, altcoins enter a vigorous phase once Bitcoin breaks its all-time high and ventures into uncharted territory. Recent indicators show a simultaneous uptick in both Bitcoin and altcoin markets, signaling a potential altcoin season on the horizon.
Swissblock Technologies’ Bitcoin-Altcoin Cycle chart illustrates the inverse relationship between Bitcoin and altcoin seasons throughout the year. When the Altcoin Season Index is high, Bitcoin’s dominance tends to be lower, and vice versa. Currently, the index indicates that altcoins are gaining strength alongside Bitcoin rather than lagging behind as in previous cycles.
Despite the positive signs in the altcoin market, it’s crucial to consider the broader market context. Over the past nine months, altcoins have generally underperformed compared to Bitcoin in terms of price recovery and proximity to their all-time highs. Factors such as regulatory scrutiny, Bitcoin’s market maturity, and institutional interest have contributed to this performance gap. However, the current breakout in altcoin markets could signify a shift in this trend towards a more balanced recovery across the wider crypto market.
Presently, Bitcoin dominance stands at 57%, slightly down from 58.6% on Sept. 19. Although it has been climbing steadily for the past two years, it reached its lowest point on Sept. 10, 2022, at 38.9%. The highest Bitcoin dominance reached in the past five years was 72% during the 2019 and 2021 bull runs. As altcoins continue to build momentum, it remains to be seen if this breakout will lead to a more balanced recovery across the crypto market.
