Altcoin Season In Limbo As Bitcoin Dominance Bounces Off Key Support
August 22 2023 - 6:15AM
NEWSBTC
Market observers are closely eyeing the tussle between Bitcoin and
its altcoin counterparts. Bitcoin’s dominance, a critical indicator
of its market influence relative to the entire crypto market, has
reached a pivotal crossroads. This juncture holds the potential to
determine whether this year’s trend of Bitcoin outperforming
altcoins will persist or if the heralded “altcoin season” is on the
horizon. Bitcoin Dominance (BTC.D) stands as a percentage value
that calculates Bitcoin’s market capitalization against the entire
global crypto market capitalization. This metric has garnered
substantial attention due to its role in reflecting shifts in
market sentiment. Since May 2021, Bitcoin dominance has oscillated
within a range of 39% to 49%. However, early June this year marked
a breakout from this range, with BTC.D briefly surging above 52%
before retracing toward the 49% level in recent weeks. A
successful retest of this level could trigger new bullish momentum
for BTC against altcoins. On the flipside, a drop below this level
could trigger a longer-term drop towards 39%, the range-low which
would trigger the start of a new altcoin season. This Is What
Bitcoin And Crypto Experts Predict Daan de Rover, a prominent
Crypto YouTuber, emphasizes the importance of understanding the
broader market cycle before predicting an “altcoin season.” He
argues that the current phase, being the pre-halving stage of the
Bitcoin cycle, might not be the optimal time for altcoin
investments. Related Reading: Bitcoin On-Chain Data Suggests Price
Is Top Heavy, What It Means De Rover highlights that a minor
retracement in Bitcoin dominance shouldn’t overshadow the
overarching upward trajectory, advising that the right time for
significant altcoin investments usually occurs after Bitcoin
surpasses its all-time high. “We are currently in the pre-halving
stage of the cycle, which is generally not the best time to buy
altcoins. Bitcoin dominance might drop by 3%, but this is likely
just a minor retracement in a larger upward move.” emphasized the
crypto YouTuber. Benjamin Cowen, the founder of ITC Crypto, sheds
light on the shifting sentiment, stating, “In June, many said BTC
dominance would never break 49% and that alt season was about to
begin. Now those same people are dunking on BTC dominance because
it had a pullback to 49%. The altcoin casino will remain open until
all the money is gone,” indicating that the altcoin market’s
potential is far from exhausted. Michaël van de Poppe, the CEO and
founder of MN Trading, delves into historical patterns to discern
the optimal time for investing in altcoins. He suggests that the
best opportunity emerges around 8-10 months before a Bitcoin
halving, during a period of low market confidence. Van de Poppe
indicates that the performance of altcoins often hinges on Bitcoin
pairs, asserting that they show interest in the markets and
initiate rallies when least anticipated. Related Reading: Bitcoin
Reaches Most “Oversold” Record Since 2020: What This Means
Highlighting the cyclical nature of the market, van de Poppe
references past instances when altcoin strength followed historical
patterns despite market variables. He references examples like
Ethereum’s cycle low in September ’19 and October ’15, occurring
precisely 252 days before Bitcoin halvings, which heralded altcoin
bull runs. The next two or three weeks will probably decide who is
right and whether Bitcoin will continue its dominance or if
altcoins will make their move and become the favored asset.
Investors should therefore watch BTC.D closely. Featured image from
iStock, chart from TradingView.com
Mina (COIN:MINAUSD)
Historical Stock Chart
From Jun 2024 to Jul 2024
Mina (COIN:MINAUSD)
Historical Stock Chart
From Jul 2023 to Jul 2024