Bitcoin (BTC) dominance hit a new yearly high, rising to 57.70% on August 9, as BTC prices rebounded strongly from lows below $50,000. However, BTC.D is currently down at the time of writing, leading many to speculate that an altcoin season may be imminent.
Bitcoin Dominance Weakens Despite Reaching New Milestone
Altcoin season is a period when 75% of the top 50 cryptocurrencies outperform the top cryptocurrency, Bitcoin. For this to happen, Bitcoin's dominance must decrease, and the total altcoin market capitalization (TOTAL2) must continuously increase.
TOTAL2 is the total market capitalization of the top 125 altcoins. At the time of writing, Bitcoin's dominance has dropped to 56.95%, while TOTAL2 has risen to $890.18 billion.
Over the past few months, many altcoins, led by Ethereum (ETH), have seen double-digit gains. However, the rally was short-lived. Additionally, the launch of Ethereum spot ETFs has not yielded the expected results, especially since the total market capitalization remains below $1 trillion at the time of writing.
BTC.D and TOTAL2 daily chart | Source: TradingView
More notably, the price of Bitcoin has dropped below $60,000, currently trading at $59,188. This decline has sparked discussions, especially on X, with many speculating that an altcoin season may be approaching.
For instance, popular analyst Zen suggests that this week could be bullish for altcoins as long as BTC maintains trading between $53,500 and $60,800.
“This week could be a bullish week for altcoins. At least against BTC. For this scenario to happen, Bitcoin should hold steady between $53.5-60.8k.”
Furthermore, recent events suggest that Zen’s assessment may be correct. According to Lookonchain, many institutions have stopped buying more BTC despite having a large amount of stablecoins available just a few days ago. If these institutions stop accumulating, Bitcoin’s dominance could decline further.
Source: Lookonchain
Is altcoin season happening?
Meanwhile, the daily chart of TOTAL2 shows that it is trying to break the descending structure. As seen below, the price has formed a series of lower lows (LL) from May to early August.
TOTAL2 Daily Chart | Source: TradingView
To be clear, a lower low is created when the price of a cryptocurrency falls below the previous low, signaling a continuation of the downtrend. However, at the time of writing, the total altcoin market capitalization has formed a lower high (LH), suggesting that a strong uptrend could develop if this momentum continues.
However, if Bitcoin bulls come in with a new round of accumulation, the prediction could be invalidated, and the altcoin season will not take place.
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