Over the past week, the total cryptocurrency market capitalization has surged by 20.33%, climbing from $1.814 trillion to $2.182 trillion. The significant $368 billion increase was primarily driven by Bitcoin [BTC].
This surge was reflected in the Bitcoin dominance chart, which rose from 56.87% on September 8th to 58.59% on September 18th before experiencing a slight pullback, approaching a crucial resistance level below the 60% mark.
Understanding the Importance of this Resistance
The Bitcoin Dominance chart gauges BTC’s market capitalization relative to the total cryptocurrency market, encompassing major altcoins. An increase in BTC.D signifies a scenario where Bitcoin outperforms the broader market.
In an analysis shared by crypto analyst Ali Martinez, it was highlighted that the dominance chart had formed a rising wedge pattern and potentially peaked below the significant 60% resistance level. A decline in BTC dominance could signal capital moving towards alternative coins.
Such a shift could potentially trigger an ‘alt season’, characterized by substantial gains for holders of various altcoin projects.
The altcoin season index recently showed a reading of 35, with a minimum reading of 75 typically indicating the onset of an alt season. This upward trend could be promising for long-term participants in the crypto market.
Insights from Stablecoin Activity Point to Altcoin Season
Additionally, data from the stablecoin supply ratio metric suggests that conditions are aligning for a potential alt season. The metric’s downtrend implies that the collective market capitalization of stablecoins is increasing relative to Bitcoin.
This trend indicates growing purchasing power within the market, potentially paving the way for a surge in altcoin prices.
However, it’s worth noting that the metric’s current readings are far from the lows observed in October 2023, which preceded the last significant altcoin rally.