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Bitcoin dominance has fallen to 56%.
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In the last 90 days, Stellar, Hedera and XRP, among others, surpass bitcoin in profitability.
A new dawn for alternative cryptocurrencies is underway. The long-awaited altseason has finally begun, marking a significant change in the market landscape.
The term altseason refers to a period in which altcoins, that is, all cryptocurrencies other than bitcoin (BTC), experience a substantial increase in their value and trade volume.
During this phase, altcoins consistently outperform bitcoin within three months, attracting the attention of investors towards more diversified assets.
He Altcoin-season-index/” target=”_blank” rel=”noreferrer noopener”>Altcoin Season Index by Blockchain Center is the key barometer for determining whether the market is in an altseason.
According to this indicator, at least 75% of top 50 altcoins must outperform bitcoin in the last 90 days to confirm the arrival of this phase. It is important to note that this calculation excludes stablecoins and anchored tokens such as WBTC or stETH.
At the moment, the index shows a value of 76%indicating that most altcoins are gaining strength against bitcoin, as seen in the chart below.
Altcoin Season Index. Source: Blockchain Center.
It is worth clarifying that this number is variable and can change greatly, minute by minute.
What’s up with bitcoin dominance?
Another factor that reinforces this narrative is the dominance of bitcoin, currently located at 56%, a level that has not been seen since the beginning of 2021just as CriptoNoticias reported.
Bitcoin dominance. Source: TradingView.
Bitcoin dominance is calculated by dividing the bitcoin market capitalization by the total Cryptocurrency market capitalization.
High dominance usually indicates that investors are primarily focused on bitcoin. However, Its decline suggests greater diversification towards altcoins.
This drop in dominance represents a change in market preferences, something that benefits altcoins such as Stellar (XLM), Hedera (HBAR), XRP of Rippledogecoin (DOGE) and SUI, which have demonstrated outstanding performance in this period (90 days), as seen in the following graph.
Performance of 50 crypto assets in the last 90 days. Source: Blockchain Center.
In the last three months, a total of 37 cryptocurrencies have surpassed bitcoin’s market performancefurther consolidating the idea that the market is immersed in this special phase.
The theory behind the bullish movement
The analyst and trader known as Mustache shared an analysis technical that supports the idea of a new bullish cycle for altcoins.
Based on the Elliott Wave Theory, Mustache identifies cyclical patterns in altcoin price movement.
According to this theory, waves 1 and 2 have already completed, indicating the start of a new significant move, as seen in the chart below.
Technical analysis of altcoins. Source: Mustache.
The analysis suggests a wedge formation, with horizontal lines projecting ambitious price targets. If this pattern follows historical cycles, the market could be facing a phenomenon similar to the 2017 altcoin boom..
“The second wave has recently begun,” says the analyst, pointing to a possible price explosion on the horizon.
New market dynamics
Despite historical and technical patterns, The current altseason is marked by a different dynamic to that of previous cycles. According to a Ki Young Ju analysisfounder and CEO of CryptoQuant, the phenomenon is no longer exclusively defined by the rotation of assets from bitcoin to altcoins.
Instead, the increase in altcoin trading volume now mostly driven by stablecoin pairs.
Ki Young Ju presents two charts showing the aggregate trading volume of altcoins, but with different trading pairs: one against bitcoin and one against stablecoins.
Aggregate trading volume of altcoins against bitcoin and against stablecoins. Source: CryptoQuant.
The first chart shows a higher correlation with the price of bitcoin. Volume spikes often coincide with bitcoin price movements, indicating that many investors use BTC as an exchange currency to buy and sell altcoins.
The second chart shows a more stable and less correlated trend with the price of bitcoin. The use of stablecoins to trade altcoins has increased in recent yearswhich provides greater stability and liquidity to the altcoin market.
This represents a significant change in the structure of the market. The use of stablecoins has increased, providing greater stability and liquidity.
Ki Young Ju points out that the trading charts show that the volume associated with stablecoin pairs has less correlation with bitcoin movementsindicating real market growth. “The liquidity of stablecoins better explains altcoin markets,” he says.
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