Over the past month, the price of Bitcoin has seen a significant increase. The price has risen 30% to reach a new annual high of $35,000, 10% above the previous peak this year. Interestingly, while Bitcoin’s growth is clearly visible, the broader cryptocurrency market has not quite managed to keep pace.
Altcoin market cap
Altcoin’s market cap, the total cryptocurrency market cap excluding Bitcoin, traded within a descending triangle. This pattern, characterized by lower highs and equal lows, often indicates a bearish trend in the market. This pattern suggests that sellers are gradually overtaking buyers.
A breakout from such a pattern is usually seen as a bullish indicator, with the target being the first peak. In this case, Altcoin’s market cap could potentially rise another 15%, matching annual highs in April.
Crypto total market cap excluding BTC. Source: TOTAL2 on TradingView
A similar pattern was seen in the previous cycle, when Altcoin’s market cap traded within a falling wedge. After the outbreak, Altcoin’s market capitalization increased by 90%. Such historical trends demonstrate the importance of closely monitoring these patterns as potential indicators of market shifts.
In contrast, while Altcoin’s market cap is hitting lower highs, Bitcoin’s price is forming new yearly highs. This dynamic suggests that Bitcoin is gaining market share from the rest of the crypto market. This is often referred to as ‘Bitcoin season’.
Bitcoin season
Bitcoin’s market share stands at 54%, the highest in over two years.
The last time Bitcoin’s market share was at this level was during the 2021 bull market. As that year progressed, the asset began to lose market share as investors turned their attention to lower-capitalization coins, enticed by the prospect of higher returns.
Now the trend seems to be reversing. Investors are attracted to Bitcoin again, lured by its higher returns than the rest of the crypto market.
Bitcoin dominance (market share % in the cryptocurrency market). Source: BTC.D from TradingView
The next resistance is at 58%, so if Bitcoin crosses this line, it could gain another 5% in market share.
Historical trends have shown that Bitcoin often takes the lead in the early stages of bull markets as it continues to create new all-time highs. This is typically driven by Bitcoin-centric narratives, such as the halving reducing the new supply of Bitcoin being mined. This year, there are increased expectations surrounding the possible approval of a Bitcoin ETF. If approved, it could pave the way for a wider range of investors to get involved with the asset.
Notable Altcoins Artists
Even during the dominant ‘Bitcoin season’, certain Altcoins have still managed to show even more impressive returns. Some notable ones include the following:
- Injective: +74%
- Solana: +68%
- PEPE: +67%
- YIELD: +45%
- Chain link: +45%
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Featured image from ShutterStock, charts from TradingView.com