On December 4, the altcoin season index reached 88, suggesting that cryptocurrencies beyond Bitcoin may perform better than the top cryptocurrency. However, the prospects for the altcoin season have taken a significant hit.
Nevertheless, it seems that the long-awaited altcoin season still has the potential to return. Below are three signs that many cryptocurrencies in the top 50 may soon witness significant growth.
Altcoins Continue to Be Pressured
The altcoin season is the period when altcoins experience superior growth compared to Bitcoin. The altcoin season index measures this trend, determining whether 75% of the top 50 cryptocurrencies are outperforming Bitcoin.
Typically, an index value above 75 indicates that the altcoin season has started, while a value at 25 reflects Bitcoin dominance. However, currently, the index has dropped to 49, indicating a retreat of altcoins as Bitcoin regains a stronger position in the market.
Despite this downturn, the altcoin season does not seem to be over. One indicator of this is the Bitcoin dominance ratio.
An increase in the Bitcoin dominance ratio often indicates a growing preference for Bitcoin over altcoins, especially during uncertain market periods. This trend suggests that investors view Bitcoin as a safer choice, due to its relative stability and established position in the market.
As the dominance ratio increases, interest in smaller cryptocurrencies may decline, leading to a reduction in capital flow into altcoins. A few weeks ago, Bitcoin's dominance ratio climbed to 62%, suggesting that altcoins may no longer hold a secondary role.
However, at the moment, this index has decreased to 58.82%, indicating that altcoins have regained some market share. If this decline continues, BTC prices may fall while the prices of altcoins could surge.
Altcoin Market Capitalization May Still Recover
The market capitalization of TOTAL2, which tracks the top 125 altcoins, recently dropped to $1.35 trillion, indicating that assets beyond Bitcoin are struggling. This decline often signals that the altcoin season may be delayed, as Bitcoin dominates the market.
However, hope remains as TOTAL2 breaks through a downward triangle, signaling a potential trend reversal. Although the altcoin season may be struggling at the moment, this breakout suggests that altcoins may regain momentum if trading volume starts to increase.
If this volume increases, the market capitalization of TOTAL2 could rise to $1.65 trillion, marking a revival of the altcoin season and potentially driving the value of these coins higher.
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