From March to October, Bitcoin’s trajectory was a rollercoaster of ups and downs, with September and October showing remarkable upward trends. The 29th of October saw Bitcoin almost reaching its historical peak, hitting a high of $73.6k before encountering resistance.
Analysis of on-chain data indicated a surge in the volume of large transactions and a prevailing bullish sentiment in shorter timeframes.
Looking at longer timeframes, the flow of capital and market rotation are expected to play crucial roles in determining the fate of both Bitcoin and alternative cryptocurrencies in this market phase.
Is the Altcoin Season on the Horizon?
According to Benjamin Cowen, the CEO and Founder of Into The Cryptoverse, an altcoin season is likely to emerge “in the coming year.” He highlighted that the aggregate dominance of Bitcoin, Ethereum, USDT, and USDC peaked at 82% in both 2020 and 2023, marking the beginning of altcoin market upswings.
Currently, this dominance stands at 80.51%, hovering near its peak. A setback followed by a sustained downward trend would suggest that other altcoins are outperforming Bitcoin and Ethereum.
Furthermore, a decline in the market share held by stablecoins would indicate a gradual shift towards crypto investments.
Cowen anticipates this shift to commence in 2025, implying that investors in alternative cryptocurrencies need to exercise patience before witnessing substantial returns.
The altcoin season index corroborated this perspective, displaying a reading of 27, signifying that the altcoin market was struggling to keep pace with Bitcoin’s movements.
Another significant observation is the disproportionate impact on altcoins during market sell-offs, as they tend to experience more significant drawdowns compared to Bitcoin.
Promising Indications for Investors
The Bitcoin dominance chart exhibited a breakthrough beyond a critical resistance point from the previous cycle.
Currently standing at 60.5%, BTC.D is positioned to ascend towards 72%, the peak from the previous cycle.
Nevertheless, it is not mandatory for BTC.D to hit 72% before the onset of the altcoin season.
Instead, a breach in the positive trend of BTC.D through technical analysis would serve as an early signal for the impending altcoin season.
Traders and investors should remain watchful for this indicator, as a higher BTC.D level before a reversal could lead to more lucrative gains in the altcoin market that ensues.
The overarching narrative is that Bitcoin acts as a magnetic force, attracting significant capital to the cryptocurrency sphere. Additionally, the rotation of investments from Bitcoin to other altcoins contributes to the emergence of an altcoin season.
Considering the current scenario, it might be an opportune moment to accumulate more alternative cryptocurrencies that align with an investor’s convictions.