According to several cryptocurrency analysts, altcoins are showing a notable breakthrough, hinting at a potential shift towards an altcoin-dominated market phase.
Analysts have observed that the total market capitalization of altcoins is increasing, breaking a long-standing downward trend. Technical and on-chain analyst Ali Martinez noted that while it is uncertain whether a true altcoin season has arrived, current developments represent a promising start.
Analyst Caleb Franzen shared his insights on altcoins measured via TradingView indices like TOTAL.3 and OTHERS. exceeds significant moving averages, particularly the 100-day and 200-day exponential moving averages (EMA). Franzen pointed out that the last such escape occurred in July 2023, during which altcoins used these EMAs as dynamic support to reach higher highs. He stressed the importance of monitoring the closes daily to confirm this trend.
Negentropic also highlighted the cyclical nature of the crypto market, suggesting that altcoins generally follow Bitcoin’s bullish momentum, often entering a vigorous phase once Bitcoin surpasses its all-time high and enters uncharted territory. The analysis indicates that after several instances since May where Bitcoin surged without triggering an altcoin season, current indicators show a simultaneous rise in the Bitcoin and altcoin markets.
The Bitcoin-Altcoin cycle chart from Swissblock Technologies illustrates this relationship. The chart depicts the inverse dynamics between Bitcoin and altcoin seasons throughout the year. When the Altcoin Seasonal Index is high, Bitcoin dominance tends to be lower, and vice versa. Currently, the index suggests that altcoins are gaining strength alongside Bitcoin rather than lagging like in previous cycles.
Bitcoin Season Overshadows Altcoins So Far in 2024
Despite these positive signs, it is important to consider the broader context of the market. Over the past nine months, altcoins have generally underperformed Bitcoin in terms of price recovery and proximity to their all-time highs. Bitcoin is trading around $64,334, approximately 12.77% below its ATH of $73,750, reached in March 2024. In contrast, many altcoins remain significantly below their peak prices. For example, Dogecoin is around 86.12% below its ATH, Cardano is down 89.22%, and Polkadot is down 92.49% from its high.
This disparity suggests that while Bitcoin has regained much of its value, altcoins have struggled to recover to the same extent. Factors contributing to this performance gap may include increased regulatory oversight affecting smaller cryptocurrencies, the maturity of the Bitcoin market providing resilience during volatility, and increased institutional interest primarily benefiting Bitcoin.
The current breakout in altcoin markets could mean a change in this trend. If altcoins continue to build on this momentum, it could lead to a more balanced recovery across the entire crypto market.
Currently, Bitcoin dominance is at 57%, down slightly from 58.6% on September 19. It reached its lowest level on September 10, 2022, at 38.9%, and has increased steadily over the past two years. Over the past five years, the highest level reached was 72% near the peak of the 2019 and 2021 bull runs.
