The notion of an altcoin season for this bull cycle is getting closer, with recent price action in the past seven days highlighted by a decline in the Bitcoin market dominance. Historically, a decline in Bitcoin’s share of the overall market has often been a precursor to what traders call “altcoin season,” a period when the total market cap of other cryptocurrencies outperforms Bitcoin in terms of price growth.
As it stands, the CMC Altcoin Season Index is at a reading of 72, teasing the onset of an altcoin season.
Bitcoin Market Dominance Faces Pressure
Bitcoin is still on its way to reaching the $100,000 threshold, with many investors anticipating this break sometime in early December. However, recent market trends suggest a notable shift in focus, with investor interest gradually pivoting away from Bitcoin and toward altcoins. As such, cryptocurrencies like XRP, Solana, and Ethereum were able to outperform the leading crypto asset.
Over the past several months, Bitcoin has held a commanding presence, especially during its rally to recent highs. According to data from Coinmarketcap, the Bitcoin dominance is at 56.1% of the entire crypto maket cap at the time of writing. Although this is still a majority, it is highlighted by a 2.84% decline in the past 24 hours. To put this into perspective, the market dominance of Bitcoin was at 60.1% on November 21.
Ethereum, on the other hand, has seen its share of the entire crypto market cap increase to 13.1%. Meanwhile, other altcoins, including Solana and XRP, have also seen their collective market share rise. The broader altcoin segment now accounts for 30.8% of the total market capitalization, a 2.7% increase over the last 24 hours.
According to crypto analyst Captain Faibik, the total market cap of Bitcoin has broken below the lower trendline of a rising wedge pattern. This sort of formation is typically considered a bearish reversal pattern when it appears in an uptrend. With that in mind, he noted that “Altseason 2024-25 has Officially kicked off!”
Altcoin Season Index Points To Market Dominance
The Altcoin Season Index from CoinMarketCap currently shows a reading of 72, reflecting the growing strength of the altcoin market relative to Bitcoin. This index measures the price performance of the top 100 cryptocurrencies over a rolling 90-day period. For the market to officially qualify as an Altcoin Season, at least 75% of these tracked altcoins must outperform Bitcoin, and the index must reach a threshold of 75.
While the current reading of 72 falls just short of this mark, it underscores the notable outperformance of altcoins compared to Bitcoin. To put this into comparison, the Altcoin Season index was at 48 last week and 32 last month. With the 75 threshold for Altcoin Season almost within reach, the market momentum suggests that a shift toward altcoin dominance could soon be confirmed.
Featured image from Morningstar, chart from TradingView