According to multiple crypto analysts, altcoins have shown a notable breakout, signaling a possible transition to an altcoin-dominated market phase.
Analysts noted that altcoin market capitalization is on the rise, breaking a long-standing downward trend. Ali Martinez, a technology and on-chain analyst, noted that while it is unclear whether full-fledged altcoin season has arrived, current developments mark a promising start:
Analyst Caleb Franzen said altcoins measured by TradingView's TOTAL.3 and OTHERS indexes are Exceeded Important moving averages, especially the 100-day and 200-day exponential moving averages (EMAs). Franzen said the last such breakout was In July 2023, the altcoin used these EMAs as dynamic support to achieve higher highs. He emphasized the importance of monitoring daily close prices to confirm this trend.
Negentropic also pointed out the cyclical nature of the cryptocurrency market, suggesting that altcoins typically follow Bitcoin's bullish momentum and often enter an active phase once Bitcoin breaks through its all-time high and enters uncharted territory.The analysis noted that while there have been several instances of Bitcoin rallying since May without triggering an altcoin season, current indicators point to a simultaneous rise in both the Bitcoin and altcoin markets.
Swissblock Technologies' Bitcoin-Altcoin Cycle chart illustrates this relationship. The chart shows the inverse movement between Bitcoin and altcoin seasons throughout the year. When the Altcoin Season 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 behind as in previous cycles.
Bitcoin Season 2024 Has Dominated Altcoins So Far
Despite these positive signs, it is important to consider the broader market situation. Over the past nine months, altcoins have generally underperformed compared to Bitcoin in terms of price recovery and proximity to all-time highs. Bitcoin is trading at $64,334, about 12.77% below the all-time high of $73,750 reached in March 2024. In contrast, many altcoins are significantly below their peak prices. For example, Dogecoin is about 86.12% below its all-time high, Cardano is down 89.22% and Polkadot is down 92.49% from its all-time high.
This difference suggests that Bitcoin has recovered a lot of value, while altcoins have struggled to recover to the same extent. Factors contributing to this difference in performance include increased regulatory scrutiny affecting smaller cryptocurrencies, a maturing Bitcoin market that has made it more resilient during volatility, and growing institutional interest that primarily benefits Bitcoin.
The current surge in the altcoin market could signal a change in this trend. If altcoins maintain their momentum, it could lead to a more balanced recovery across the cryptocurrency market.
Bitcoin dominance currently sits at 57%, down slightly from 58.6% on Sept. 19. It has been steadily rising over the past two years, hitting a low of 38.9% on Sept. 10, 2022. Its highest point in the past five years was 72% during the bull market peaks of 2019 and 2021.
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