Bitcoin experienced an upward trend in September and October following a gradual decline since March. By October 29th, it was on the verge of retesting its all-time high, reaching a peak of $73.6k before encountering resistance.
Examination of on-chain data showed a surge in significant transaction volume and positive sentiment in shorter timeframes.
For the upcoming cycle, the flow of capital and rotation will play a crucial role in shaping the dynamics of both Bitcoin and alternative digital assets.
Is the Altcoin Season Approaching?
According to Benjamin Cowen, the CEO and Founder of Into The Cryptoverse, an altcoin season is expected in the coming year.
Cowen pointed out that the collective dominance of Bitcoin, Ethereum, USDT, and USDC reached 82% in 2020 and 2023, marking peaks before the altcoin market witnessed a surge.
As of now, this figure stands at 80.51%, nearing its peak. A rejection followed by a sustained downtrend would suggest that Bitcoin and Ethereum are lagging behind the broader altcoin market.
Furthermore, a decrease in stablecoin market share would indicate a shift towards cryptocurrency investments.
Cowen anticipates this trend to start in 2025, implying that holders of altcoins may need to exercise patience before substantial gains materialize.
A reading of 27 on the altcoin season index echoed these sentiments, indicating that the altcoin market was struggling to match the movements of BTC.
Another aspect to consider is how altcoins tend to be more heavily impacted and experience greater declines than Bitcoin during market downturns.
Promising Indicators for Investors
The Bitcoin dominance chart exhibited a breakthrough past a critical resistance level from the previous cycle.
Currently at 60.5%, BTC.D is positioned to climb towards 72%, the high point of the previous cycle.
Nevertheless, it is not mandatory for BTC.D to reach 72% before the onset of the altcoin season.
By relying on technical analysis alone, a disruption in the bullish trend of BTC.D could serve as an early signal of the approaching altcoin season.
This is an additional aspect that traders and investors can observe. The further BTC.D ascends before a reversal, the more substantial the subsequent gains in altcoins might be.
This is due to the fact that Bitcoin acts as a magnet that attracts the majority of funds to the cryptocurrency sphere. Furthermore, the transition of funds from Bitcoin to other altcoins plays a role in the initiation of an altcoin season.
As of now, it remains an opportune time to accumulate altcoins that investors have strong convictions about.