The cryptocurrency market is showing signs of an upcoming altcoin season, a period marked by higher prices for other assets compared to Bitcoin. Market participants often shift their focus and capital towards altcoins during this period.
Article Contents
Altcoin season may have begun
Altcoins may need some extra time.
Frequently Asked Questions
Altcoin season may have begun
One such indicator is the rising trend in TOTAL3, a metric that tracks the total market cap of all cryptocurrencies except Bitcoin and Ethereum. As of this writing, it stands at $933 billion, up 35% since the start of the month. To put that into perspective, this group of assets has added $212 billion in the past 22 days.
With TOTAL3 approaching its all-time high of $1.13 trillion, it suggests that investors are allocating more capital to altcoins. It is worth noting that the TOTAL3 surge comes amid a period of consolidation for Bitcoin (BTC.D) dominance.
Readings from its daily chart show that BTC.D has fluctuated between 61% and 58% since November 8. As of the time of writing, BTC.D stands at 59.30%.
When TOTAL3 jumps while BTC.D consolidates, it is an important indicator of a potential altcoin season. This means that investors are shifting their focus from Bitcoin to other cryptocurrencies, leading to increased demand and possibly higher prices for altcoins.
Furthermore, in a new report, on-chain data provider CryptoQuant has noted an increase in the values of several top-tier altcoins since the conclusion of the US presidential election, confirming that a potential altcoin season could be underway.
Furthermore, CryptoQuant explains that a surge in spot trading volume has accompanied this price rise.
Altcoins may need some extra time.
While the readings from the above indicators suggest that there could be an altcoin season in the near term, it is important to note that this will be confirmed when at least 75% of the top 50 altcoins outperform Bitcoin over a three-month period.
However, data from the Blockchain Center reveals that only 43% of these prominent altcoins have outperformed Bitcoin in the past 90 days — well below the 75% threshold required to officially declare altcoin season.
Frequently Asked Questions
What is TOTAL3 in the context of cryptocurrencies?
TOTAL3 is a metric that tracks the total market capitalization of all cryptocurrencies except Bitcoin and Ethereum, indicating where capital is directed in the market.
How is the altcoin season determined?
Altcoin season is defined when at least 75% of the leading altcoins outperform Bitcoin over a three-month period.
What are the signs of an altcoin season?
Evidence includes an increase in TOTAL3 and a consolidation of Bitcoin dominance, indicating a shift in focus towards altcoins.