- The combined dominance chart was approaching its previous peaks.
- The influx of capital into the crypto sphere via rising BTC prices has been essential for a healthy altcoin season.
Bitcoin [BTC] rose in September and October, after a slow but steady decline since March. On October 29, the index nearly retested its all-time high, heading north to $73.6k before being rejected.
Analysis of on-chain metrics revealed an increase in high transaction volume and bullish sentiment in shorter time frames.
Longer term, capital inflows and rotation will be critical for the Bitcoin and altcoin markets in this cycle.
How close are we to an altcoin season?
Source: Benjamin Cowen about X
Benjamin Cowen, CEO and Founder of Into The Cryptoverse, Expects an Altcoin Season “next year“.
He noted that the combined dominance of Bitcoin and Ethereum [ETH]USDT and USDC reached 82% in 2020 and 2023 and were at the top before the altcoin market recovered.
At the time of writing this was 80.51%, approaching the top. A rejection and a continued downtrend would indicate Bitcoin and Ethereum being outpaced by the rest of the altcoin market.
Furthermore, a downward trend in stablecoin market share would be a signal that investors are buying crypto.
Cowen expects this to start in 2025, meaning altcoin holders will need more patience before they can make big gains.
Source: Blockchain Center
The altcoin seasonal index agreed, and the value of 27 showed that the altcoin market could not keep up with BTC’s movements.
Another factor is that altcoins are hit much harder than BTC during a sell-off and experience a bigger drop.
Encouraging signals for investors
Source: BTC.D on TradingView
The Bitcoin dominance chart showed a move past a key resistance from the previous cycle.
At 60.5%, BTC.D is poised to rise towards 72%, the top of the previous cycle.
However, it is not necessary that BTC.D has to reach 72% before the altcoin season can start.
Instead, based on technical analysis alone, a break in BTC.D’s bullish structure would be an early sign that altcoin season is upon us.
This is another factor that traders and investors can pay attention to. The higher BTC.D goes before a reversal, the better the altcoin gains that follow could be.
Read Bitcoin’s [BTC] Price forecast 2024-25
This is because Bitcoin is the magnet that attracts the most money into the crypto ecosystem. The rotation from BTC to other altcoins also contributes to an altcoin season.
As things stand now, it’s still a good time to gather more alts that a market participant has conviction in.