The long-anticipated altcoin season has still not truly arrived. Meanwhile, Bitcoin continues to reach record high prices recently, causing many altcoin investors to feel uneasy. However, this is not necessarily a bad sign for altcoin investors. Although Bitcoin still leads and shows no signs of cooling down, there are still factors that could help the altcoin market catch up.
Bitcoin reaches historical peak, Altcoin is 'waiting for its time'
Recently, Bitcoin has surpassed the threshold of 122,000 dollars without signs of overheating. This indicates that Bitcoin's price surge is still ongoing, but it also means that altcoin investors will have to continue waiting. The strong growth of Bitcoin has attracted a large portion of the capital flow into this market, diminishing the attention and profitability of altcoins in recent times.
However, the market is not entirely devoid of prospects for altcoins. One notable factor is the strong recovery of Ethereum, the second largest cryptocurrency, which has surged to 3,000 dollars. The significant demand for Ethereum from investors and DeFi, NFT projects could be the catalyst for the next price surge for altcoins, potentially igniting the altcoin season that many are still hoping for.
At the current moment, the altcoin season index is still at a low level. According to data, this index remains below 25, indicating that the market is still in the Bitcoin season. To mark the transition to altcoin season, this index needs to surpass 75. This indicates that, despite positive signs, the altcoin market has not yet truly revved up.
This index has also not seen significant changes compared to March this year, when the index level has only slightly increased above 30. To affirm that the market is shifting, investors need to look for clearer changes in this index in the upcoming period.
BTC.D – Indicator of capital shift
One of the important indicators that helps us assess the potential movement of the altcoin season is Bitcoin Dominance (BTC.D). Statistics show that BTC.D has dropped significantly since the end of June, indicating that the market capitalization of altcoins is growing much stronger than Bitcoin. Over the past two weeks, the BTC.D index has decreased by about 2.07%, with this change having a significant impact on the market.
The current market capitalization of altcoins has surpassed the threshold of 1.25 trillion dollars, a significant milestone for the development of these currencies.
If the altcoin market continues to maintain the upward momentum above the resistance level of 1.25 trillion dollars, it may challenge the peak of 1.64 trillion dollars recorded in December 2021. However, this cannot happen if Bitcoin does not continue to lead the market by maintaining strong growth. Typically, strong growth periods of Bitcoin will lead to a rotation of capital into altcoins, creating explosive altcoin seasons.
Looking back at market history, we can see that the explosion of altcoin season is often associated with a sharp decline in the BTC.D index. The last months of 2017 and the first half of 2021 are prime examples, when BTC.D dropped to 40%. Currently, BTC.D is at 64.65%, much lower than the 40% level during previous price surges. This raises the question of whether this cycle will be different. Only time will answer this question.
With positive signals from Ethereum and the adjustment of BTC.D, it is possible that the altcoin market will soon experience a strong price surge. However, for the altcoin season to truly arrive, Bitcoin must continue to play the leading role, and only when capital flows strongly into altcoins can we expect a promising altcoin season.
In general, although the altcoin season has not yet arrived, the market is still in a phase of positive development, and this brings hope for altcoin investors in the near future. As long as Bitcoin continues to maintain its growth trend and Ethereum along with some other altcoins continue to attract capital flow, the altcoin season may not be far off.