Digital currency analyst Simeon Koch drew attention to the dominance #بيتكوين in the market in his assessment and warned of the upcoming altcoin season.
According to Koch, for altcoin seasons to begin, Bitcoin's market dominance rate must first reach a periodic peak. This rate peaked at around 70% in previous bull markets and currently stands at around 66%, which is on an upward trend.
The American attack on Iranian nuclear facilities over the weekend has escalated tensions in the Middle East. U.S. President Donald Trump described the operation as 'completely successful,' while the Iranian government responded by accusing the U.S. of crossing red lines and announcing that all American bases in the region are potential targets. Iran also threatened to halt maritime navigation in the Strait of Hormuz.
These developments have increased the sense of risk in financial markets. As in traditional crisis periods, investors have turned to safe havens (gold, oil, and in this case Bitcoin) instead of risky assets (such as altcoins). This has led to an increase in Bitcoin's market dominance, reaching 66%, its highest level in recent years. This increase is considered the biggest barrier to the start of an altcoin season. However, Iran targeted the American base in Qatar afterward with prior notice, which helped to ease tensions.
Bitcoin dominance is the ratio between the market capitalization of Bitcoin and the total value of the entire cryptocurrency market. When this ratio increases, it means that the vast majority of investors are keeping their money in Bitcoin. When it decreases, capital shifts towards altcoins. This shift is one of the main signs of an altcoin season.
Analyst Simeon Koch stated, 'Bitcoin dominance usually peaks at the end of bull cycles and then declines. Alongside this decline, altcoins experience sudden and sharp rises.' However, he added that this period carries significant risks despite the high profit potential.
Koch stated that technical indicators show that Bitcoin dominance is approaching its peak. Indicators such as the Relative Strength Index (RSI) are in the overbought zone. Additionally, the inverse correlation of the global liquidity index also indicates a potential decline in dominance in the near future. If this scenario occurs, it is said that the altcoin season may begin as capital shifts towards them.
According to the analyst, when studying previous cycles, it is observed that the altcoin season usually starts during periods when Bitcoin dominance is experiencing a continuous decline for several weeks or months. During these periods, major altcoins, such as Ethereum, Solana, and XRP, outperform Bitcoin, indicating an increased appetite for risk among investors.
Tools such as the Altcoin Season Index are also used to track this. This index indicates the start of the altcoin season if 75% of the largest altcoins have outperformed Bitcoin over the past ninety days. The Altcoin Season Index currently stands at 16, indicating continued Bitcoin dominance.
Koch pointed out that the altcoin season is the period that sees the highest gains in the cryptocurrency market, but it simultaneously carries the highest risks: 'Investors may want to jump in when the music is at its peak. But it is also essential to see the exit at the right time. The altcoin season ends at its peak, and it may be followed immediately by a sharp bear market.'
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