The market is preparing to experience a new altseason for the second time in 2024. This term refers to the period in which cryptocurrencies other than Bitcoin (BTC) experience a notable increase in their price.
Generally, An altseason usually takes place after a strong bullish trend. bitcoin. This is because when the currency created by Satoshi Nakamoto It has a good performance, optimism is expanding in the market and awakening investors’ appetite for risk.
According to him Altcoin-season-index/” target=”_blank” rel=”noreferrer noopener”>Blockchain Center websitethere is an altseason when 75% of the 50 largest capitalization cryptocurrencies outperform BTC in 90 days.
The same site has an “altseason index”, a tool that indicates whether the market is going through an altcoin season. As seen in the following graph, 73% of digital currencies with the highest market capitalization performed better than bitcoin in the last 90 days.
Another indicator that is anticipating that the altcoin season is getting closer and closer is the bitcoin dominance. As seen in the following graph, it is currently 57%, a level that has not been seen since the beginning of 2021.
Dominance is calculated by dividing the BTC market capitalization by the total Cryptocurrency market capitalization.
When dominance is high, it is a sign that much of the money in the market is concentrated in BTC. On the other hand, a drop in this indicator suggests that Investors are diversifying their holdings into altcoins like Ethereum-killer-programs-aplicaciones-memecoins/” target=”_blank” rel=”noreferrer noopener”>sunny (SUN), dogecoin (DOGE) or ether (ETH)the native currency of the ecosystem Ethereum.
Bitcoin dominance from 2020 to November 30, 2024. Source: TradingView.
Likewise, it should be noted that the total market capitalization of altcoins is sending a positive signal in the market. technical analysis indicator called moving average convergence/divergence, better known by its acronym MACD.
This is an indicator that serves to identify the general price trend of an assetdepending on its momentum, direction and duration. As shown in the chart below, it has three components: the MACD line (blue), the signal line (red), and the histogram (red or green bars).
In this case, the capitalization is taken without counting BTC and ETH, because they dominate a large part of the market and their movements eclipse the rest of the digital assets. In this way, you can have a more detailed view of the altcoin market.
The MACD line is obtained by subtracting a long-term exponential moving average (EMA) from a short-term one, typically 26 and 12 days, respectively.
On the other hand, the signal line is the EMA of the value resulting from the MACD line, generally calculated over 9 periods. Finally, the histogram represents the difference between both lines.
In this way, when both lines are falling, it is interpreted as a bearish signal. But, when it starts to rise, it indicates a change towards an uptrend.
This scenario is further reinforced when the histogram turns to positive values, surpassing the zero level, and the MACD line crosses above the signal lineas is currently happening.
The so-called Golden Cross also stands out in the graph. As CriptoNoticias has explained, it is a technical analysis indicator that announces the end of one trend and the beginning of another.
As occurred in 2023, it coincides with bullish movements in the capitalization of the total cryptocurrency market.
Given the current panorama, the next few hours will be decisive to confirm if the bullish trend consolidates and, finally, we witness the beginning of a new altseason.
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