Altcoins are currently showing signs of a significant breakout, indicating a potential shift towards a market phase dominated by altcoins, according to various crypto analysts. The total market capitalization of altcoins has been on the rise, breaking out of long-standing downward trends. Ali Martinez, a technical and on-chain analyst, mentioned that while it is uncertain whether a full-fledged altcoin season has arrived, the current developments are a promising start.
Caleb Franzen, another analyst, highlighted that altcoins measured through TradingView indexes like TOTAL.3 and OTHERS have surpassed significant moving averages such as the 100-day and 200-day exponential moving averages (EMAs). Franzen pointed out that the last breakout of this nature occurred in July 2023, where altcoins used these EMAs as dynamic support to achieve higher highs. He emphasized the importance of monitoring daily closes to confirm this trend.
Negentropic also noted the cyclical nature of the crypto market, suggesting that altcoins typically follow Bitcoin’s bullish momentum. They often enter a vigorous phase once Bitcoin breaks its all-time high and moves into uncharted territory. Recent indicators show a simultaneous uptick in both Bitcoin and altcoin markets after several instances since May where Bitcoin surged without triggering an altcoin season.
The Bitcoin-Altcoin Cycle chart from Swissblock Technologies illustrates the inverse dynamics between Bitcoin and altcoin seasons throughout the year. When the Altcoin Season Index is high, Bitcoin’s dominance tends to be lower, and vice versa. Currently, the index suggests that altcoins are gaining strength alongside Bitcoin rather than lagging behind, as seen in previous cycles.
Despite these positive signs, it is essential to consider the broader market context. Over the past nine months, altcoins have generally underperformed compared to Bitcoin in terms of price recovery and proximity to their all-time highs. While Bitcoin is trading around $64,334, approximately 12.77% below its all-time high of $73,750 reached in March 2024, many altcoins remain significantly below their peak prices.
Factors contributing to this performance gap may include increased regulatory scrutiny affecting smaller cryptocurrencies, Bitcoin’s market maturity offering resilience during volatility, and heightened institutional interest predominantly benefiting Bitcoin. The current breakout in altcoin markets could signal a change in this trend, leading to a more balanced recovery across the wider crypto market.
Currently, Bitcoin dominance stands at 57%, slightly down from 58.6% on Sept. 19. It reached its lowest point on Sept. 10, 2022, at 38.9% and has been steadily climbing for the past two years. Over the past five years, the highest Bitcoin dominance reached was 72% during the 2019 and 2021 bull runs.