After the sharp sell-offs at the beginning of the week, altcoins made a strong comeback, boosting investor optimism. Among the top ten altcoins by market value, Solana (SOL) rose by 10%, trading at $136, effectively recovering last week's losses. Other major altcoins like #Cardano (ADA), Dogecoin (DOGE), and Toncoin (TON) also increased by 3-5%. This recovery in altcoins is a result of Bitcoin's (BTC) declining dominance over the market, and analysts believe the upward trend will continue to gain momentum.
Impact of Bitcoin's Declining Market Dominance
The recent drop in Bitcoin's price saw the largest cryptocurrency fall below $59,000 before climbing back above the $60,000 threshold. This decline coincided with a 2% decrease in Bitcoin's market dominance over the past 24 hours. The drop in dominance indicates significant liquidity flow into altcoins, explaining their recent price increases.
The "Total 3 Index," which includes Bitcoin and Ethereum, maintained strong support levels, indicating a potential trend reversal. This development has led to speculation among investors about the start of an altcoin season. The rise in this index suggests a possible shift in investor focus from Bitcoin to altcoins.
Renowned cryptocurrency analyst Michael van de Poppe reminded that altcoins typically follow Bitcoin's downtrend but tend to recover when the crypto king finds its bottom. Poppe also added that BTC trading pairs usually show signs of bottoming out before USDT trading pairs. Referring to the recent activity in altcoins against Bitcoin and the impact of the upcoming Mt. Gox Bitcoin and Bitcoin Cash repayments, he pointed out multiple indicators suggesting that the trend might already be shifting from a downtrend to an uptrend.
Investors Monitor Potential Signs of Altcoin Season
The recovery of altcoins in an environment where Bitcoin's market dominance is declining indicates a changing dynamic in the cryptocurrency market. Investors are closely monitoring signs of a sustainable altcoin season where altcoins outperform the largest cryptocurrency. The recent movement in the Total 3 Index and analyst predictions support the idea that the market might be entering a new growth phase led by altcoins.