• Altcoin season is underway as the market cap reaches $4 trillion and Bitcoin's dominance has dropped to its lowest level in months, indicating capital rotation.

Analysts suggest exiting when the altcoin season index reaches 70+, or when TOTAL3 approaches its target of $2 trillion through cup and handle patterns.

  • Key points from the article on exit include ETH's outperformance over BTC, increased activity in meme coins, and BTC.D falling below 50%, often indicating the end of the cycle.

  • The market cap of the cryptocurrency market reached a record level of $4 trillion in July. At the same time, Bitcoin's dominance fell to 61.5%, the lowest since April. These are clear signals, according to analysts, confirming the official start of altcoin season.

    The important question now is when should investors exit the market. Based on insights from experienced traders, this article outlines several key factors to watch.

    Altcoin investors began seeing profits in July.

    Most altcoin investors who started buying in June are seeing profits now. This is because the market cap of altcoins (TOTAL2) has risen by 44% since then, reaching $1.5 trillion.

    The Glassnode index confirms the capital rotation to altcoins starting from early July.

  • Glassnode's altcoin season index. Source: Glassnode

  • Glassnode reported that "Glassnode's Altseason Index triggered on July 9. This means that stablecoin supplies are expanding, capital is flowing into BTC and ETH, and at the same time, the market cap of altcoins is rising — a favorable structural environment for capital rotation."

  • Today, data from CryptoBubbles shows a green market. Many altcoins have risen between 10% and over 20%.

  • Performance of altcoin prices on July 18. Source: CryptoBubbles

  • However, history shows that the altcoin season in late 2024 ended with sharp declines. Many altcoins fell by 50% to 90%. Many investors failed to act quickly and watched their portfolios sink into larger losses.

    For this reason, determining when to take profits is as important as determining when altcoin season begins.

    Analysts recommend four factors to determine exit timing.

    The altcoin season index is considered the simplest and most widely used signal. This index is commonly used to identify entry points. But when it reaches its peak, it also serves as a warning for the broader market.

    As of the time of writing this report, Coinglass reports that the index is at 49. When it reaches 70 to 100 points, investors are advised to take profits.

  • Altcoin season index. Source: Coinglass

  • Coinglass reported that "The altcoin season index is rising, and the market cap for altcoins has significantly increased in recent days. When the index reaches over 70, it's time to sell your altcoins. Isn't it?".

  • Other investors use technical analysis of the market cap for altcoins (TOTAL3) as a guide. Analysts like Peter Brandt and Greeny believe that TOTAL3 is forming a cup and handle pattern.

  • Cup and handle pattern for TOTAL3. Source: Greeny

  • Using the measurement theory for this pattern, TOTAL3 could reach a target of $2 trillion. This could be a key point where altcoin holders should consider exiting.

    Some investors are tracking the capital flow cycle to determine when the season might end. For example, investor NekoZ believes that the market is now entering the second phase of a four-phase cycle.

  • The four-phase capital flow cycle in the cryptocurrency market. Source: NekoZ

  • NekoZ said that "Ethereum has started to outperform Bitcoin in terms of returns, indicating that we have moved to the second phase of altcoin season."

In this context:

Phase 1 is Bitcoin's dominance.

Phase 2 is Ethereum's outperformance over Bitcoin.

Phase 3 sees large market cap altcoins rising.

Phase 4 is when small market cap altcoins and meme coins rise, often indicating the final phase of altcoin season.

Many observers are closely monitoring this progress.

The final factor to consider is Bitcoin's dominance (BTC.D). In July, BTC.D dropped from 65.5% to 61%, marking the largest monthly decline since November 2024. Analysts looking at trend lines from previous cycles believe that altcoin season may continue until BTC.D drops to 48% to 50%.

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