The total cryptocurrency market capitalization has increased by 20% in three weeks, mainly due to the Federal Reserve's interest rate cuts and the rise of Bitcoin.
Bitcoin dominance is approaching a critical resistance level, which could open the door for an altcoin season. A breakdown in Bitcoin dominance could lead to a massive rally in altcoins.
Over the past three weeks, the cryptocurrency market has risen nearly 20%, with total market capitalization rising from $1.828 trillion to $2.261 trillion. The growth, largely driven by the Federal Reserve’s recent rate cuts, has pushed Bitcoin to a one-month high of $65,142. But now, Bitcoin’s dominance is facing a key resistance level, which raises the question: Is altcoin season coming?
Bitcoin's dominance faces resistance – Can altcoins break through?
Bitcoin's dominance once reached a high of 58.59% and is currently struggling to break through key resistance levels. According to Bitcoinsensus analysts, a decline in Bitcoin's dominance could signal a strong rebound for altcoins.
They point out that Bitcoin's dominance chart shows a bearish triangle flag pattern on the weekly time frame. If this pattern breaks down, Bitcoin's market share could decline, making room for altcoins to rise.
Key support levels may trigger a surge in altcoins
Bitcoin's dominance is currently around 57%, with key support at 47.5%, matching the 50% Fibonacci retracement level. In the past, when Bitcoin's dominance declined, more capital flowed into altcoins, driving up their prices. If Bitcoin's dominance continues to fall and breaks below the current resistance level, altcoins may surge significantly.
The 47.5% support level is particularly important as it is often a reversal point. If Bitcoin rebounds from this level, it could regain market control. However, if the downtrend continues, altcoins may outperform Bitcoin in the coming weeks.
Altcoin Season: Is it too early to say?
Despite encouraging technical signals, it may be too early to declare the start of altcoin season. According to data from the Blockchain Center, only 31% of the top 50 altcoins have outperformed Bitcoin in the past 90 days, indicating that altcoin season has not officially begun.
Conclusion:
The altcoin season index is currently at 31, far from the 75 points needed to confirm an altcoin season. While a rising score may bring hope to long-term investors, it is clear that more gains are needed before altcoins take the lead.
