To understand how decreasing Bitcoin (BTC) dominance and increasing Total 3 (Altcoin Market Cap excluding BTC and ETH) can result in an Altseason, let’s break this down:
1. BTC Dominance
What it is: The percentage of the total cryptocurrency market cap that Bitcoin holds.Decreasing BTC Dominance: This means other cryptocurrencies (alts) are gaining a larger share of the total crypto market cap relative to Bitcoin.
Key Implications:
Money is flowing out of Bitcoin into altcoins.Investors are showing interest in diversifying into riskier but potentially high-reward altcoins.Indicates a potential shift in market sentiment from Bitcoin to other cryptos.
2. Total 3
What it is: The combined market cap of all altcoins excluding Bitcoin and Ethereum.Increasing Total 3: This signifies that altcoins (beyond BTC and ETH) are attracting significant investment, leading to growth in their market capitalization.
Key Implications:
Funds are flowing into smaller and mid-cap altcoins.A surge in Total 3 often suggests broader interest in speculative or new projects.Can signal early stages of an Altseason, where altcoins significantly outperform Bitcoin.
3. Altseason
Definition: A period when altcoins experience rapid growth and outperform Bitcoin in terms of price gains.Trigger Conditions:Decreasing BTC Dominance: Indicates money moving from Bitcoin into other cryptocurrencies.Increasing Total 3: Confirms that this money is specifically going into smaller altcoins.
Why This Happens
Market Maturity: Once Bitcoin rallies or stabilizes, investors look for higher returns in altcoins.Profit Rotation: Investors take profits from Bitcoin and Ethereum, reallocating to altcoins, driving their prices higher.Speculation: Smaller altcoins often have higher growth potential, attracting traders looking for quick gains.
How It Leads to Altseason
BTC Dominance Drops: Reflects reduced focus on Bitcoin, signaling diversification.Total 3 Increases: Indicates strong momentum and inflow into altcoins.Result: Altcoins start showing exponential price growth, outperforming Bitcoin and Ethereum. This creates a self-reinforcing cycle of profit-taking and reinvestment into altcoins.
In Conclusion
Decreasing BTC dominance + Increasing Total 3 → Shifts market focus to altcoins.A consistent trend in these metrics often leads to an Altseason, where altcoins see massive price surges relative to Bitcoin.
Keep an eye on other indicators like trading volume, sentiment analysis, and BTC price stability for confirmation.
My favourite alts are
#eth #link #arb #Atom #XRP