The cryptocurrency market is showing signs of an approaching altcoin season, a period marked by the rise in prices of other assets relative to Bitcoin. Market participants often shift their attention and investment capital towards altcoins during this period.
Several key indicators are beginning to point to a gradual shift in this market dynamic. This analysis delves into some of those factors.
An Altcoin Season May Be Occurring
One of those indicators is the growth trend of TOTAL3, an index that tracks the total market capitalization of all cryptocurrencies except Bitcoin and Ethereum. As of now, this figure stands at $933 billion, up 35% since the beginning of the month. To put it in perspective, this asset group has added $212 billion over the past 22 days.
TOTAL3. Source: TradingView
As TOTAL3 approaches an all-time high of $1.13 trillion, it indicates that investors are allocating more capital to altcoins. Notably, the growth of TOTAL3 occurs during a period focused on stabilizing Bitcoin's dominance (BTC.D).
According to the daily chart, BTC.D has fluctuated from 61% to 58% since November 8. At the time of writing, BTC.D stands at 59.30%.
When TOTAL3 spikes while BTC.D stabilizes, it is an important indicator of the potential for an altcoin season. This means that investors are shifting from Bitcoin to other cryptocurrencies, leading to increased demand and potentially higher prices for altcoins.
Bitcoin's dominance ratio. Source: TradingView
Furthermore, in a recent report, on-chain data provider CryptoQuant observed an increase in the value of several Layer-1 altcoins since the conclusion of the U.S. presidential election, affirming that an altcoin season may be underway.
Cryptocurrencies like XRP, TRX (TRON), TON, ADA, and SOL have seen their prices rise sharply in anticipation that the new U.S. administration will support cryptocurrencies more,” CryptoQuant stated.
Furthermore, CryptoQuant explains that the increase in spot trading volume has accompanied this price growth.
"Daily spot trading volume for altcoins increased after the U.S. presidential election, peaking at $18 billion on November 11, the highest since early August. Previously, the spot trading volume of altcoins had remained quiet since May."
Spot trading volume of Bitcoin and Altcoin. Source: CryptoQuant
Altcoins Need More Time
Although the aforementioned indicators suggest that an altcoin season may occur in the near future, 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.
Altcoin Season Index. Source: Blockchain Center
However, data from Blockchain Center reveals that only 43% of these top altcoins have outperformed Bitcoin over the past 90 days — much lower than the 75% required to officially declare an altcoin season.
Follow me @TinTucBitcoin #tintucbitcoin #Write2Win #btc #binance #binance
