Bitcoin’s (BTC) dominance rate hit a new yearly high, reaching 57.70% on August 9 as BTC’s price strongly rebounded from lows below $50,000. However, BTC.D is currently declining at the time of writing, leading many to speculate that an altcoin season could be on the horizon.
Bitcoin’s Dominance Weakens Despite Reaching a New Milestone
Altcoin season is a period when 75% of the top 50 cryptocurrencies outperform Bitcoin. For this to happen, Bitcoin’s dominance rate must decrease, and the total market capitalization of altcoins (TOTAL2) must consistently rise.
TOTAL2 represents the total market capitalization of the top 125 altcoins. At the time of writing, Bitcoin’s dominance rate has fallen to 56.95%, while TOTAL2 has risen to $890.18 billion.
A few months ago, many altcoins, led by Ethereum (ETH), saw double-digit gains. However, this rally was short-lived. Additionally, the launch of spot Ethereum ETFs did not produce the expected results, especially with the total market cap still below $1 trillion at the time of writing.
Notably, Bitcoin’s price has fallen below $60,000 and is currently trading at $59,188. This decline has sparked discussions, particularly on X, with many speculating that an altcoin season may be approaching.
For instance, well-known analyst Zen suggested that this week could be a bullish week for altcoins as long as BTC continues to trade within the $53,500 to $60,800 range.
‘This week could be a bullish week for altcoins, at least compared to BTC. For this scenario to play out, Bitcoin should remain stable within the $53.5-60.8k range.’
Moreover, recent events suggest that Zen’s assessment might be correct. According to Lookonchain, many institutions have stopped buying additional BTC despite having a significant amount of stablecoins just days before. If these institutions cease accumulation, Bitcoin’s dominance rate could decline further.
Will an Altcoin Season Occur?
Meanwhile, TOTAL2’s daily chart shows that it is attempting to break out of a descending structure. As seen below, the value has formed a series of lower lows (LL) from May to early August.
To clarify, a lower low is created when a cryptocurrency’s price falls below its previous low, signaling a continued downtrend. However, at the time of writing, the total market cap of altcoins has formed a lower high (LH), indicating that a strong upward trend could develop if this momentum continues.
However, if Bitcoin bulls step in with a new accumulation round, this prediction could be invalidated, and an altcoin season might not occur.
You can check coin prices here.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do their own research before making decisions. We are not responsible for your investment decisions.