The combined dominance chart was nearing its previous tops.
Capital influx into the crypto sphere through rising BTC prices was essential for a healthy altcoin season.
Bitcoin [BTC] trended upward in September and October after slowly but steadily falling lower since March. On the 29th of October, it nearly retested its all-time high, going as far north as $73.6k before facing rejection.
Analysis of on-chain metrics revealed an increase in large transaction volume and bullish sentiment in lower timeframes.
On higher timeframes, capital influx and rotation will be key for Bitcoin and altcoin markets in this cycle.
How close are we to an altcoin season?
Source: Benjamin Cowen on X
Benjamin Cowen, CEO and Founder of Into The Cryptoverse, expects an altcoin season “next year“.
He noted that the combined dominance of Bitcoin, Ethereum [ETH], USDT, and USDC reached 82% in 2020 and 2023, forming tops before the altcoin market rallied.
At press time, it was at 80.51%, nearing its top. A rejection and sustained downtrend would indicate that Bitcoin and Ethereum were being outpaced by the rest of the altcoin market.
Additionally, a downtrend in stablecoin market share would signal investors buying crypto.
Cowen expects this to begin in 2025, meaning altcoin holders need more patience before seeing large gains.
Source: Blockchain Center
The altcoin season index agreed, and its reading of 27 showed that the altcoin market was unable to keep up with BTC’s moves.
Another factor is how, during a sell-off, altcoins are much more affected than BTC and experience greater draw-downs.
Encouraging signs for investors
Source: BTC.D on TradingView
The Bitcoin dominance chart showed a move beyond a key resistance from the previous cycle has occurred.
At 60.5%, BTC.D is poised to surge toward 72%, the previous cycle’s top.
However, it is not necessary that BTC.D must reach 72% before the altcoin season can ensue.
Instead, using technical analysis alone, a break in the bullish structure of the BTC.D would be an early sign that the altcoin season is arriving.
This is another factor traders and investors can watch out for. The higher the BTC.D goes before a reversal, the better the altcoin gains that follow could be.
Read Bitcoin’s [BTC] Price Prediction 2024-25
This is because Bitcoin is the magnet that draws the most money to the crypto ecosystem. Also, rotation from BTC to other altcoins contributes to an altcoin season.
As things stand, it is still a good time to accumulate more alts which a market participant has conviction for.
