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Cryptocurrency News Articles
Altcoin Market Poised for a Resurgence as Season Index Nears a Rebound
Oct 20, 2024 at 01:20 am
The altcoin market may be gearing up for a significant rally, with signs pointing to the potential start of a new altcoin season.
Altcoins might be gearing up for a significant rally as several indicators point to the potential start of a new altcoin season. After a period of lagging performance, altcoins could be set for a resurgence as several indicators point towards a shift in momentum.
Traders and investors are watching closely as the Altcoin Season Index (SSI) reaches its lowest point since early September, signaling a possible turning point in the narrative.
Meanwhile, the rising popularity of narratives around artificial intelligence (AI) and memes, and the potential breakout of key resistance levels in the total crypto market cap excluding Bitcoin (BTC) and Ethereum (ETH) further fuel optimism about the altcoin market.
Altcoin Season Index Nears a Rebound
The Altcoin Season Index, which measures the percentage of altcoins outperforming BTC, has dropped to a low not seen since early September. This decline, despite Bitcoin’s recent rally from $60,000 to $68,000, presents an opportunity for altcoins to stage a comeback.
BTC Price vs Percentage of Altcoins Outperforming BTC. Source: Santiment
Typically, when BTC experiences a surge, the Altcoin Season Index also rises. The current divergence, where Bitcoin’s performance has outpaced altcoins, might indicate that the altcoin market is overdue for a rebound.
A similar pattern in mid-September saw the index jump from below 5% to over 90%, sparking hopes of a potential repeat. If altcoins begin to outperform BTC again, a strong rally could follow.
Rising Narratives: AI and Memes Lead the Charge
Two major themes are currently driving the altcoin landscape: artificial intelligence (AI) and meme coins. Memes hold 32% of market attention, while AI captures 21.84%, indicating that traders are seeking culturally resonant coins that can generate viral enthusiasm.
Beyond these, other narratives like GameFi and DeFi remain relevant, though they account for smaller shares of mindshare, at 11.39% and 7.52%, respectively. As these narratives gain popularity, they point to a market that is exploring new opportunities and experimenting with high-potential projects. This growing interest in unique altcoin projects over more established assets like BTC and ETH highlights the sector’s potential for applications and significant returns.
Altcoin Season Hinges on Market Cap Movements
The crypto market cap, excluding BTC and ETH, currently stands at $624.013 billion, down from a high of $777 billion in April. However, this contraction opens the door for a reversal.
The total market cap is approaching a key resistance at $644 billion, a level it failed to break in late September. If this resistance is breached, the altcoin market could see a rally, with potential targets for the market cap being $660 billion, $709 billion, or even $740 billion.
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