Is an altcoin season approaching as Bitcoin dominance declines?Bitcoin dominance has declined from its yearly peak reached a few days ago, as Bitcoin's price fell below $60,000, leading to market speculation about a potential altcoin season. Despite Bitcoin's recent milestone, its dominance continues to fall, while the total market capitalization of the top 125 altcoins continues to rise
Is an altcoin season approaching as Bitcoin dominance declines?
Bitcoin dominance has declined from its yearly peak reached a few days ago, as Bitcoin's price fell below $60,000, leading to market speculation about a potential altcoin season. Despite Bitcoin's recent milestone, its dominance continues to fall, while the total market capitalization of the top 125 altcoins continues to rise.
Bitcoin dominance drops to yearly low
Bitcoin dominance (BTC.D) is a measure of Bitcoin's value relative to other cryptocurrencies. On August 9th, BTC.D reached a yearly high of 57.70%, as Bitcoin price recovered from earlier dips below the $50,000 level. However, BTC.D has since fallen to 56.95%, sparking market speculation about the potential end of the altcoin season.
Total market capitalization of altcoins continues to rise
In contrast to Bitcoin's declining dominance, the total market capitalization of the top 125 altcoins (TOTAL2) is rising steadily. As of now, TOTAL2 has reached $890.18 billion. Several altcoins, led by Ethereum (ETH), saw double-digit price gains a few months ago, although this rise was short-lived.
Institutional investor behavior raises concerns
Its noteworthy that Bitcoin's fall below $60,000 sparked discussions about a potential altcoin season. Crypto trader Zen believes that altcoins could be bullish this week as long as Bitcoin stays within the $53,500 to $60,800 range. Data from Lookonchain shows that institutional investors, who are crucial for Bitcoin's price, have stopped buying the token, suggesting that Bitcoin dominance might decline further.
Altcoin market trend analysis
The TOTAL2 daily chart indicates that the altcoin market is breaking out of a downtrend. The altcoin market formed a series of lower lows (LL) between May and early August, suggesting the downtrend was continuing. However, the altcoin market is now reaching a lower high (LH), suggesting a potential significant uptrend if the momentum continues.
The possibility of an altcoin season
Although the altcoin market is showing bullish signs, an altcoin season might not materialize if Bitcoin bulls re-enter the market and begin a new accumulation phase. Ultimately, the arrival of an altcoin season depends on changes in institutional investor behavior and market sentiment.
Conclusion
The decline in Bitcoin dominance and the rise in the total market capitalization of altcoins suggest the possibility of an altcoin season. However, the final outcome is still subject to changes in institutional investor behavior and market sentiment. Investors need to closely monitor market movements and make investment decisions based on their risk tolerance.
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