According to several crypto analysts, altcoins are experiencing 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 on the rise, breaking from long-standing downward trends. Technical and on-chain analyst Ali Martinez noted that while it is uncertain whether a full-fledged altcoin season has arrived, current developments represent a promising start.
Analyst Caleb Franzen shared information that altcoins measured by TradingView indices such as TOTAL.3 and OTHERS have exceeds important moving averages, especially the 100- and 200-day exponential moving averages (EMAs). Franzen pointed out that the last such breakout occurred in July 2023, during which altcoins used these EMAs as dynamic support to reach higher highs. He stressed the importance of monitoring daily closes to confirm this trend.
Negentropic also highlighted the cyclical nature of the cryptocurrency market, suggesting that altcoins typically follow Bitcoin’s bullish momentum, often entering a strong phase once Bitcoin breaks its all-time high and moves into 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 both Bitcoin and altcoin markets.
Swissblock Technologies’ Bitcoin-Altcoin Cycle Chart illustrates this relationship. The chart depicts the inverse dynamics 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 Eclipses Altcoin Season So Far in 2024
Despite these positive signs, it is important to consider the broader market context. 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, which is about 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 about 86.12% below its ATH, Cardano is down 89.22%, and Polkadot is down 92.49% from its all-time 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 scrutiny affecting smaller cryptocurrencies, the maturity of the Bitcoin market providing resilience during times of volatility, and increased institutional interest primarily benefiting Bitcoin.
The current breakout in altcoin markets could signal a change in this trend. If altcoins continue on this path, it could lead to a more balanced recovery across the entire cryptocurrency market.
Currently, Bitcoin dominance is at 57%, down slightly from 58.6% on September 19. It bottomed out on September 10, 2022, at 38.9%, and has been climbing 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.
