The total market capitalization of crypto has seen strong growth, increasing by more than 15% by mid-July, reaching a record high of $3.8 trillion last Monday. This growth is primarily driven by the surge in Bitcoin's price, as the coin hit a new all-time high of $123,218, helping the market achieve an impressive recovery amid tightening regulatory measures and political deadlock in the U.S.
Notably, the increasing dominance of Ethereum is gradually weakening Bitcoin's market share, reflecting a growing risk appetite among investors. Veteran trader Peter Brandt pointed out that the 'cup and handle' pattern on the total crypto market capitalization chart (excluding Bitcoin) may signal the beginning of a new altcoin season.
Bitcoin's dominance decreases as Ethereum and other altcoins grow.
The Bitcoin dominance index (BTC.D) reflects the percentage of Bitcoin's market capitalization value compared to the entire crypto market. In the altcoin seasons of 2018 and 2022, capital rotation from Bitcoin to altcoins led to a sharp decline in BTC.D.
As of now, BTC.D still accounts for the majority of the market at 62.89%, however, it has sharply decreased from 66% on June 27. If this dominance ratio continues to decline and closes weekly below the support level of 63.15%, established by the close on May 11, then BTC.D may continue to decrease and head towards the 50-week EMA level at 60.9%.
Meanwhile, the dominance rate of Ethereum (ETH.D) is experiencing impressive growth, reaching 11.02% from 9.04% at the end of June. This indicates the increasing strength of Ethereum compared to Bitcoin. At the same time, the ETH/BTC chart shows that Ether has surpassed Bitcoin, rising in price by 16% this week.
The change in dominance between Bitcoin and Ethereum reflects a strong trend of capital flow shifting from Bitcoin to altcoins, particularly Ethereum. This opens up an exciting phase in the market, as investors begin to ramp up asset allocation to other cryptocurrencies beyond Bitcoin.
The Altcoin Season is gradually forming a strong growth pattern.
The crypto market has just recorded a new historical milestone as the total market capitalization reached a record high of $3.8 trillion last Monday. This growth occurs against a backdrop of improving market sentiment. The Fear and Greed Index from CoinMarketCap (CMC), an indicator of investor sentiment, has surged to 70, indicating increased greed and a higher risk acceptance within the community.
Additionally, the CMC Altcoin Season Index has significantly increased to 38 points, compared to just 23 points on July 1, indicating that capital flows are increasingly shifting from Bitcoin to altcoins. By rule, a value above 75 points is a sign of a true altcoin season. This could signal an active investment cycle into altcoin assets.
Continuous capital injections have caused the total market capitalization of cryptocurrencies (excluding Bitcoin, TOTAL 2) to increase by more than 8% this week, reaching $1.41 trillion. Veteran trader Peter Brandt also pointed out that the weekly chart of TOTAL 2 is forming a 'cup and handle' pattern, a sign of potential growth. Notably, the neckline of this pattern is at $1.7 trillion, close to the all-time high of $1.71 trillion during the altcoin season of 2021.
A weekly close above this threshold could signal the beginning of a new altcoin cycle, driving a surge in cryptocurrencies outside of Bitcoin.
If this happens, the market capitalization of altcoins could surpass the $2 trillion mark, pulling the total cryptocurrency market value above the $4 trillion threshold. This would be a significant milestone, indicating a strong shift in investor attention from Bitcoin to altcoins, opening up opportunities for the robust growth of other blockchain projects.
In this context, the crypto market is entering a new phase with promising signals for the altcoin season, where Ethereum and other altcoins may become the investment focus.
