Bitcoin Dominance Nears Its Peak, Signaling Altcoin Season Is Coming

The cryptocurrency market is witnessing a dynamic shift as Bitcoin dominance nears its peak within an Elliott wave structure, signaling a potential correction and a favorable environment for altcoins.

Key Takeaways

The cryptocurrency market is showing a dynamic shift as Bitcoin dominance nears its peak within an Elliott wave structure, signaling a potential correction and a favorable environment for altcoins.

While Bitcoin’s price continues to climb steadily, altcoins like Stellar Lumens (XLM), Mantra (OM), and Hedera (HBAR) have demonstrated explosive growth, significantly outperforming Bitcoin in both BTC and USD terms.

XLM has emerged as the top gainer, maintaining its momentum even as other altcoins plateau, hinting at a potential altcoin season.

Bitcoin’s Dominance

The daily chart for Bitcoin dominance reveals a steady upward trend within a defined Elliott wave structure, with wave 5 now nearing completion. After breaking above critical resistance levels around 53% in early 2023, BTC.D has maintained a bullish trajectory, peaking near 61.5% on Nov. 21. This movement aligns with a rising wedge pattern, which indicates the possibility of a correction once the structure concludes.

A further rise is expected to reach its next 62.5% horizontal resistance level target. A corrective wave could follow, potentially retracing to prior support zones and aligning with the conclusion of wave 5. This shift would indicate a transition in momentum from Bitcoin to altcoins, fostering a more favorable environment for the altcoin market.

The Altcoin Season Index graph measures whether the market favors altcoins or Bitcoin. The index ranges from 0 to 100, with a reading below 25 indicating a “Bitcoin Season,” while a reading above 75 suggests an “Altcoin Season.” The zone between 25 and 75 represents a neutral market phase where neither Bitcoin nor altcoins dominate significantly.

Key Observations:

This chart suggests that the market is currently in a consolidation phase, with no decisive leadership by either Bitcoin or altcoins, potentially setting the stage for a future shift depending on broader market conditions.

Bitcoin Outperformers

Over the past week, altcoins have demonstrated significant outperformance against Bitcoin, highlighting a shift in market momentum. Stellar (XLM) leads the pack with a 101% gain in BTC terms and a 122% increase in USD. Mantra (OM) follows closely with a 99% BTC gain and a 120% surge in USD, while Hedera (HBAR) also performed impressively, posting a 75% gain in BTC terms and a 92% rise in USD.

Meanwhile, Bitcoin saw a modest 10.50% increase in USD, reaching a new high of $98,835. This data underscores a notable altcoin rally, with smaller-cap assets dramatically outperforming the market leader.

The chart above compares the performance of the three mentioned cryptocurrencies: Stellar Lumens (XLM), Mantra (OM), and Hedera (HBAR). XLM (yellow line) shows the most significant upward movement, surpassing both OM (pink line) and HBAR (purple line). XLM has surged to $0.30, significantly outperforming the other two assets.

OM and HBAR have seen gains but have not matched XLM’s steep rally, which peaked on Nov. 18, while XLM's momentum persisted.

Altcoin Season Nears as Bitcoin Hits Key Resistance

In conclusion, the current market dynamics reflect a transitional phase. Bitcoin’s dominance nears the completion of a significant wave structure, signaling a potential correction and opportunities for the altcoin market to gain ground.

The Altcoin Season Index confirms a balanced but Bitcoin-favoring environment, with the possibility of an altcoin breakout as market conditions shift. Stellar Lumens (XLM), Mantra (OM), and Hedera (HBAR) exemplify this trend, showcasing remarkable outperformance against Bitcoin, driven by strong investor interest and momentum.

XLM stands out as the clear leader, sustaining its bullish trajectory beyond the peaks of OM and HBAR, fueled by network-specific developments and heightened trading activity.

As Bitcoin dominance approaches key resistance levels and altcoins gain ground, the market could pivot toward a more favorable environment for smaller-cap assets, setting the stage for a dynamic end to the year and potential trends for 2025.