Bitcoin Dominance Declines After Yearly High, Sparking Speculation of Upcoming Altcoin Season
Bitcoin’s (BTC) dominance reached a yearly peak of 57.70% on August 9, as BTC’s price rebounded from a dip below $50,000. However, at the time of writing, Bitcoin dominance, often referred to as BTC.D, has declined, fueling speculation that an altcoin season may be imminent.
Bitcoin’s Dominance Dips After Recent High
Altcoin season is characterized by a period when 75% of the top 50 cryptocurrencies, excluding Bitcoin, outperform BTC. For this to occur, Bitcoin’s dominance must fall, and the TOTAL2 market cap, which aggregates the market cap of the top 125 altcoins, needs to show a consistent rise.
Currently, Bitcoin dominance has decreased to 56.95%, while the TOTAL2 market cap has increased to $890.18 billion. Several months ago, many altcoins, led by Ethereum (ETH), experienced double-digit gains. However, this rally was short-lived. Moreover, the introduction of spot Ethereum ETFs has not met expectations, as the TOTAL market cap remains below $1 trillion.
Bitcoin’s price has also fallen below $60,000, currently trading at $58,188. This drop has rekindled discussions, particularly on X (formerly Twitter), with many speculating that the altcoin season might be approaching.
Crypto trader Zen suggested that this week could be favorable for altcoins, provided Bitcoin remains within the $53,500 to $60,800 range. “This week might be bullish for alts. At least against $BTC. For that scenario to be valid, Bitcoin should stay more or less stable within the 53.5k-60.8k range,” Zen wrote on X.
Recent developments lend weight to Zen’s perspective. Lookonchain reports that institutions, which have previously played a crucial role in driving Bitcoin’s price, have recently refrained from purchasing the coin. This is notable considering these institutions had access to a significant amount of stablecoins just days earlier. If these institutions halt their accumulation, Bitcoin’s dominance might decline further.
Is Alt Season on the Horizon?
The TOTAL2 daily chart indicates a breakout from the previous downtrend. The chart shows a series of Lower Lows (LL) from May through early August. A lower low signifies a continued downtrend as the price falls to a new low below its previous level. However, the altcoin market has now reached a Lower High (LH), suggesting that a significant upward trend could emerge if the current momentum continues.
Yet, if Bitcoin experiences another round of accumulation by bullish investors, this prediction might be invalidated, potentially postponing or preventing the onset of an altcoin season.
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