As 2024 ends, many signs point to the arrival of the next altcoin season. Economist Henrik Zeberg has forecasted a breakout for altcoins, with Solana (SOL) being the leader, his opinions aligning with patterns emerging in Bitcoin dominance, particularly the formation of a “rising wedge” on the chart.
Economist Henrik Zeberg predicted the altcoin season based on the wedge pattern forming on the Bitcoin dominance chart. Source: X
Altcoin season is when cryptocurrencies other than Bitcoin experience price increases. During this time, altcoins often outperform Bitcoin as more investors focus on alternative projects.
What the Bitcoin Dominance Chart Tells Us
A key indicator of altcoin season is Bitcoin dominance. This measures the percentage of the total cryptocurrency market that Bitcoin holds. When Bitcoin’s dominance decreases, it often signals the start of an altcoin rally.
Analysts are bullish for next altcoin season. Source: X
The recent Bitcoin dominance chart shows an interesting pattern known as a rising wedge. This pattern forms when the price makes higher and lower highs within a narrow range. Rising wedges are generally considered bearish signals, often predicting a price drop.
The chart shows that Bitcoin dominance has broken below this wedge, suggesting that Bitcoin may lose market share to altcoins. This could be the beginning of a strong altcoin season.
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Comparing to Past Alt-Seasons
Looking at past alt-seasons can help explain what might happen next. Two important alt-seasons occurred in 2017-2018 and 2021.
In late 2017, the market saw a boom in Initial Coin Offerings (ICOs). Many projects launched their own tokens to raise funds, and investors flocked to these new opportunities. As a result, Bitcoin’s dominance dropped from 86.3% at the end of 2017 to just 38.69% in early 2018.
During this period, the total market value of altcoins surged from $30 billion to over $600 billion. Ethereum grew from $8 in January 2017 to over $1,400 by January 2018. Ripple also experienced substantial growth, climbing from $0.006 to over $3. Litecoin also saw an increase from $4 to nearly $350 by the end of 2017.
However, this excitement led to many projects launching without real products. By early 2018, regulatory pressure and market saturation triggered a major correction.
In 2021, alt-season returned, but the focus changed. Instead of ICOs, decentralized finance (DeFi) platforms and non-fungible tokens (NFTs) drove the market. Altcoins like Solana rose from $1.60 in early 2021 to over $250 by November. Avalanche and Polygon also gained popularity as investors sought scalable alternatives to Ethereum.
This time, projects with real-world applications saw the most growth. The market matured, and altcoins with solid technology outperformed speculative ones.
Signs of a New Alt-Season in 2024
In November 2024, Bitcoin surged past $100k after Donald Trump won the US presidential election. However, its dominance started to fall again. The token dropped from 55% at the beginning of the month to around 50% by mid-November. This change suggests investors may be moving funds from Bitcoin into altcoins.
Major exchanges like Binance and Coinbase reported increased trading volume for altcoins. Solana, for example, reached new highs, while other altcoins saw price gains. This movement signals that capital is rotating into alternative projects, a key sign of an upcoming alt-season.
Why Alt-Season Could Be Near
Several factors suggest that alt-season is around the corner. The 1400-day cycle theory points to a pattern where Bitcoin’s dominance peaks approximately every four years before declining.
Analyst predicts Bitcoin dominance to fall again based on the historic pattern.
This cycle appears to be repeating, indicating that the market may enter a new phase where altcoins outperform Bitcoin.
The current chart mirrors the pattern seen in 2017 and 2021, where Bitcoin dominance dropped sharply and altcoins rallied. If this pattern holds, the next few months could see explosive growth for altcoins.
