The dominance of Bitcoin [BTC] is facing challenges at a critical level of 58%, sparking optimism in the market regarding a potential surge in alternative cryptocurrencies if its dominance continues to decline.
In the past, altcoins have experienced significant growth during periods when Bitcoin’s dominance has decreased.
Starting from 2023, Bitcoin dominance (BTC.D) has risen from 40% to a recent peak of 58%.
Nevertheless, this 58% threshold also acts as a resistance level. Failure to surpass it could result in a decrease in Bitcoin dominance, leading many market analysts to anticipate a boost in the altcoin market.
Altcoin Market Reaches Highest Point in Six Months
One of the key measures used to assess the strength of the altcoin market is the ETH/BTC ratio, which indicates the value of Ethereum relative to Bitcoin.
Given that Ethereum is the largest alternative cryptocurrency, the ETH/BTC ratio serves as an indicator of the overall performance of altcoins.
Following the Federal Reserve’s shift on September 18, Ethereum has performed better than Bitcoin, signaling improved altcoin performance during a period where Bitcoin dominance decreased by 2.5%.
Recently, meme coins have experienced a significant uptick, leading the market recovery, spearheaded by Shiba Inu [SHIB].
Looking at the monthly charts, Sui Network [SUI], Bittensor [TAO], and Popcat [POPCAT] emerged as the top performers in September, boasting double and triple-digit gains.
Currently, the Altcoin Season Index stands at 49, indicating a neutral position and marking the highest level since March. This underscores the impressive performance of altcoins in the previous month.
Despite the growing interest in altcoins among investors, the founder of CryptoQuant pointed out that a significant capital shift from Bitcoin to altcoins has not yet started.
“The movement of assets from #Bitcoin to altcoins has not yet begun, but the support for altcoins is increasing. I see it as the calm before a potentially significant shift in the market.”
In other words, the altcoin season is gradually gaining traction, offering potential upsides for those with existing exposure. Consequently, market dips in Bitcoin could present favorable opportunities to acquire undervalued altcoins with substantial growth potential.