BTC.D reached its highest level in the past 3 years, when will Altcoin season take place?
Today (July 31), the BTC.D (Bitcoin Dominance) index reached its highest level since April 2021, reaching 52.7, according to CoinStats. BTC.D measures the capitalization rate of BTC compared to the entire Crypto market. This shows that money flow is focusing on BTC instead of Altcoins.
Causes include:
1. Launch of Spot BTC ETFs in early 2024, attracting interest from traditional investors.
2. Selling pressure from Grayscale's GBTC fund decreased significantly.
3. BTC is still considered to represent the Crypto market, with many politicians giving optimistic comments and open policies for BTC at the Bitcoin 2024 conference.
Although BTC has increased more than 60% since the beginning of the year, many Altcoins are searching for the bottom amid the high rise of BTC.D. This makes many investors want to optimize profits by holding Altcoins instead of BTC.
Some technical analysis suggests that Altcoin season may be coming soon. TOTAL2 chart (total market capitalization of all coins except BTC) is establishing a cup & handle model from 2021. From March 2024 to now, TOTAL2 is establishing a "handle" part. . If successful, TOTAL2 can enter a new growth cycle and lead to a boom in Altcoins.
In the short term, traders need to pay attention to the performance of BTC and the BTC index.D. Favorable conditions for Altcoin growth are BTC sideways or slightly decreasing, and BTC.D needs to decrease sharply. Currently, BTC price is trading around 65,600 USD, down 1.3% in the past 24 hours, and has broken from the uptrend on the daily frame since early July.