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Cryptocurrency News Articles
Bitcoin Dominance Decline Might Be the Key to Triggering the Next Altcoin Season
Sep 30, 2024 at 11:00 pm
Bitcoin [BTC] is poised for a potential price correction after failing to sustain its $66K level. AMBCrypto's analysis suggests that $61K could serve as the next support, marking a key bottom.
Bitcoin’s recent failure to hold on to the $66K price level has opened up the possibility of a price correction. AMBCrypto’s analysis suggests that the next support could be at $61K, which might also mark a key bottom.
Historically, altcoin seasons have followed Bitcoin’s bottoming. If this pattern repeats, then the current dip could trigger the next Altcoin Season.
Bitcoin’s market dominance currently stands at 57.37%, which has significantly declined from its recent peak of 58.59% ten days ago. This falling dominance may indicate growing confidence in altcoins.
To put things in perspective, BTC tested the $66K overhead resistance after a steady uptrend in the past two days, allowing many stakeholders to book profits. Their exit could, in turn, mark the next bottom.
Moreover, this dip might attract renewed interest from hodlers, setting the stage for potential altcoin growth.
Currently, 17 out of the top 50 coins are ranked above Bitcoin, resulting in a 34% altcoin dominance.
With many altcoins showing bullish momentum during the recent rally, another cycle might be needed to begin the next altcoin season. Hence, keeping an eye on the upcoming Bitcoin cycle is necessary to gauge when these coins might start to rally. In simpler terms…
Bitcoin consolidation might be the key
While the market enthusiasm hints at a bullish start for Bitcoin in October, a different narrative unfolds when observing the daily price chart.
If the mid-July rally repeats – wherein BTC bulls bounced off the $66K resistance and went on to breach the $68K level – Bitcoin dominance may be reinstated, diminishing the prospects of an altcoin season.
However, the sharp decline in the RSI indicated a loss in buying momentum. Should Bitcoin enter a consolidation phase, it could allow major altcoins to take the center stage.
Moreover, rising USDT outflows suggested that more stablecoins were being withdrawn from the exchanges.
Historically, such withdrawals often coincided with Bitcoin losing a major resistance zone, prompting investors to turn to USDT as a safer bet.
Furthermore, these investors found altcoins to be more attractive assets while waiting for Bitcoin to dip.
As a result, liquidity flowed into altcoins, which were cheaper alternatives, especially during increasing volatility.
To summarize, if BTC consolidates at or below $64K, investors may choose to diversify their portfolios, potentially leading to a surge in altcoins.
The season might be around the corner
Apart from the market sentiments, AMBCrypto’s analysis also found a hidden pattern in the historical trends.
Interestingly, when BTC dominance bottomed six years ago, a reversal occurred 761 days later, marking the beginning of an altcoin season.
In essence, this pattern suggests that a similar timeline could signal the next altcoin season soon.
In other words, if Bitcoin dominance is currently declining, it could eventually lead to a resurgence in altcoin values if history were to repeat itself.
Read Bitcoin’s [BTC] Price Prediction 2024-25
As highlighted earlier, the current market conditions signaled an optimal time for altcoins to surge, driven by declining Bitcoin dominance, increasing USDT outflows, and a historical pattern supporting this event.
Overall, keeping an eye on these factors is crucial. If BTC slips into consolidation – which seems likely – the next altcoin season could be triggered.
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