Author: Biraajmaan Tamuly, CoinTelegraph; Translated by: Tao Zhu, Jinse Finance
Summary
The total market capitalization of altcoins (excluding ETH) grew by $126 billion in the second quarter, sparking speculation about an altcoin season.
The market capitalization of altcoins, excluding Ethereum, increased by $126 billion in the second quarter, igniting enthusiasm among analysts who have been eagerly anticipating an altcoin season. Cryptocurrency analyst Javon Marks pointed out that this breakthrough could be comparable to the explosive bull market of 2017.
Marks highlighted a chart in his latest article on X, which compares the TOTAL3 index (the total market capitalization of altcoins excluding Bitcoin and Ethereum) with the U.S. money supply, indicating that altcoins may be on the verge of a significant increase.
The rise of the TOTAL3 index relative to the U.S. money supply indicates that the liquidity of altcoins relative to the U.S. economy is appreciating, reflecting increased investor interest and capital inflow into altcoins.
Marks emphasized that altcoins have recently rebounded from a critical retest level after breaking through, stating: 'Altcoins have rebounded from a breakthrough retest of the U.S. money supply and may be on track for one of the strongest rallies since 2017!'
Likewise, anonymous cryptocurrency trader Moustache shared an analysis about X, highlighting the inverse head and shoulders pattern appearing weekly in the TOTAL3 chart. This chart compares 2021 and 2025, reflecting the trend of altcoins in 2021, when top altcoins surged by 174% in the final stages, while Bitcoin only rose by 20%. This pattern is a bullish reversal indicator, suggesting that the market is about to rebound, with analysts predicting that altcoins will 'rise significantly.'
'Altcoin Season' triggers fluctuations in analyst sentiment
While some analysts are optimistic about the rise of altcoins, others are more cautious. Technical analyst Crypto Scient explained that the recent increase in altcoin market capitalization has not yet reflected a shift to a bullish trend on higher time frames (HTF). This analyst pointed out that TOTAL2 remains bearish after touching the $1.25 trillion resistance level, stating:
'As both BTC and TOTAL are close to resistance levels and TOTAL2 still has some room, I tend to believe we are in a distribution phase.'
Similarly, cryptocurrency commentator DonaXBT believes that a significant breakout of Bitcoin's dominance trend line is crucial for the large volatility of altcoins. The attached chart shows that Bitcoin's dominance has exceeded 60%, and the upward trend remains intact on a weekly basis.
Bitcoin's dominance. Source: Cointelegraph/TradingView
According to analysts, a drop below 60%, followed by a retest of the support area between 56% and 58%, could become the initial catalyst for a full altcoin season.
Spot trading volume of altcoins remains below $10 billion
Data from CryptoQuant shows that altcoin spot trading volume remains sluggish, with an average daily trading volume of $3 billion to $5 billion, while in the fourth quarter of 2024, it is expected to be $8 billion to $12 billion, indicating that altcoins are in the early stages of a rebound. Despite low trading volumes, market observers believe this is a precursor to significant growth in altcoins, suggesting that altcoins have yet to reach peak momentum.
Spot trading volume of Bitcoin and altcoins. Source: CryptoQuant
As noted by Blockchaincenter.net, the altcoin season index is currently at 24, further confirming that the market is in a Bitcoin season, supporting this view. Historically, an index below 25 indicates Bitcoin's dominance, but this may be a positive sign for altcoins. When the index climbs above 30-40, altcoins typically experience significant rises, mainly due to capital rotation from Bitcoin.
As trading volume shows early signs of recovery and the altcoin season index suggests a market shift, investor optimism for a rebound in altcoins is increasing.
