As multiple indicators suggest that the long-awaited altcoin season is approaching, the altcoin market is experiencing some major fluctuations. The total cryptocurrency market cap has surpassed $4 trillion for the first time. With capital flowing into altcoins and increasing institutional interest in investing through spot ETFs and on-chain assets, the 'season' for altcoins may finally have arrived.
Analysts point out that the explosive performance of altcoins such as ETH, SOL, and meme coins is a clear sign of a major shift. Ethereum has broken above $3,600, rising 20% over the past week. Other altcoins like Sui, Avalanche, Cardano, Dogecoin, and XRP have also seen increases of 15% to 20% during the same period.
Key indicators flashing 'Altcoin Season'
According to Cryptorank data, as investors shift from Bitcoin to altcoins, three key indicators show that a significant transition is occurring. First, the altcoin index has surged from 15 a month ago to 50. This substantial increase reflects the strong performance of altcoins and an expanding risk appetite. Traders are actively seeking investment opportunities beyond Bitcoin.
The altcoin season index rises when most of the top 50 cryptocurrencies by market cap (excluding Bitcoin) outperform BTC over a certain period. Once the index breaks 75, it signals the full onset of an altcoin bull market.
Secondly, despite BTC reaching an all-time high and stabilizing around $120,000, its market share has dropped from 62% to below 58% in less than a month.
Finally, the Fear and Greed Index has remained firmly in the greed zone since June 23. High market confidence combined with FOMO is driving traders towards more volatile altcoins.
Technical patterns support a breakout
Veteran trader Peter Brandt recently pointed out that a classic cup-and-handle pattern has emerged on the altcoin market cap chart, signaling strong momentum for a breakout. With the market cap nearing a critical level of $1.7 trillion, altcoins may be on the verge of significant gains.
Top analysts' considerations
Cryptocurrency analyst Michaël van de Poppe states that Ethereum has shown strong performance, rising 72% since April, outpacing Bitcoin. He believes the altcoin bull market has officially arrived. He expects the ETH rally to soon slow down, providing an opportunity for buy-the-dip before further increases. He also notes that altcoins are experiencing what he calls 'the biggest bullish divergence ever,' indicating that a strong rebound is about to begin, with significant upside potential ahead.
While the altcoin season offers significant upside potential, it also comes with substantial risks. Raoul Pal warns against chasing prices blindly, as altcoins often exhibit wave-like fluctuations. Instead, one should focus on tokens that consistently outperform BTC, ETH, and SOL on the weekly charts.
Expert Benjamin Cowen states that most altcoin exchange rates against ETH and BTC are weakening. While ETH may have bottomed out, many altcoins could still decline. Liquidity may soon flow back into Bitcoin, but a few cryptocurrencies like XRP may have already stabilized.
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