Is Altcoin Season Really Upon Us? Bitcoin Dominance Drops, TOTAL2 Indicator Breaks Downward WedgeSince September 7, the total market capitalization of altcoins has surged by almost 18%, while Bitcoin dominance has also seen a decline. This development, coupled with the trend of the TOTAL2 indicator breaking out of a downward wedge, points towards the arrival of altcoin season
Is Altcoin Season Really Upon Us? Bitcoin Dominance Drops, TOTAL2 Indicator Breaks Downward Wedge
Since September 7, the total market capitalization of altcoins has surged by almost 18%, while Bitcoin dominance has also seen a decline. This development, coupled with the trend of the TOTAL2 indicator breaking out of a downward wedge, points towards the arrival of altcoin season.
In recent years, altcoin season has become a common cryptocurrency market phenomenon, during which altcoins typically outperform Bitcoin, attracting more investor interest and capital flows. Recently, the performance of many altcoins has begun to surpass Bitcoin, leading to speculation that the market is about to enter altcoin season.
For altcoin season to be confirmed, at least 75% of the top 100 cryptocurrencies should outperform the number one cryptocurrency within 90 days. This has not happened in the past six months, as Bitcoin's dominance ensured that altcoins could only play second fiddle. However, according to data from Blockchaincenter, things are starting to change.
The altcoin season index has risen from just under 18 a few weeks ago to 31, a growth potentially linked to the performance of numerous cryptocurrencies like Sui (SUI), Bittensor (TAO), and Fantom (FTM). While the altcoin season index has improved, it's important to note that it's not altcoin season yet.
However, according to the daily chart, Bitcoin dominance (BTC.D) has been on a downward trend since September 19. Additionally, the TOTAL2 indicator, which displays the total market cap of cryptocurrencies excluding BTC, has grown almost 18% since September 7. This disparity in performance aligns with the view that Bitcoin might soon step back and allow altcoins to take the lead.
More importantly, BeInCrypto points out that the TOTAL2 indicator has broken out of a downward wedge. A downward wedge is considered a bullish signal, formed by two descending trendlines, one representing the highs and the other representing the lows. The technical pattern breakout for altcoin market cap and Bitcoin dominance suggests that sellers are starting to lose momentum, while buyers are capitalizing on this fatigue. If this trend continues, altcoins' market cap could jump to $1.3 trillion or even $1.5 trillion in the next few months.
It's worth noting that several prominent cryptocurrency figures have also echoed the sentiment that altcoin season is on the horizon. For instance, the Negentropic handle on X, run by Jan Happel, Rafael Schultze-Kraft, and Yann Allemann, founders of Glassnode and Swissblock, expressed similar views.
Swissblock Altcoin Signal at 53: We are entering Altcoin Season! When BTC breaks 64.4k, Altcoins will fly. Our framework is tagging the testnet game. WIF is strong. It's up over 16% today, BTC's testnet is 3. Imagine the move once Bitcoin charges towards ATH, Negentropic stated.
Another bullish analyst, Miles Deutscher, suggested that TOTAL3 (which is the market cap of altcoins) might break out if Ethereum (ETH) is not rejected.
Altcoins (TOTAL3) are about to explode. We could get a rejection here, but if we break out expect fireworks, Deutscher wrote.
Interestingly, BeInCrypto analysis found that TOTAL3's rise is almost identical to TOTAL2, and it's also about to break out of its downtrend channel on the daily chart. If this breakout succeeds, altcoin season could accelerate and truly materialize. However, monitoring Bitcoin dominance remains crucial. If BTC.D bounces back and altcoin market cap gets rejected, the anticipated $1.5 trillion rally might not materialize in the short term.
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