Altcoin have entered an accumulation phase after experiencing declines in the past three months.
According to the crypto trader, the Altcoin market is currently in a “reaccumulation phase” and could enter the “second phase” of the cycle after regaining a key support area.
Independent crypto trader Mags mentioned in part in a July 25 post on Platform X: “Altcoin are up just 58% since breaking out of a 525-day accumulation period.”
The accumulation phase occurs when the market bottoms and prices reach a local bottom, as reflected by the 33% drop in TOTAL2 (the total market capitalization of all cryptocurrencies excluding Bitcoin) since March 11. This phase is characterized by periods of relative stability, with investors buying into price pullbacks in anticipation of future price increases.
Sharing the following chart, Mags explained that despite this pullback, the Altcoin has rallied 58% since breaking out of a prolonged accumulation period, suggesting that there is still more room for upside.
“This pullback may just be accumulation in preparation for the next leg higher.”
TOTAL2 market capitalization daily chart. Source: Mags
Data from crypto tracking platform Bitformance shows that over the past three months, the top 200 equal-weight index (which gives equal weight to cryptocurrencies regardless of market capitalization) has fallen more than 55% relative to the market capitalization index (which weights cryptocurrencies according to market capitalization).
The drop shows that smaller cryptocurrencies are underperforming Bitcoin, suggesting that Altcoin season is yet to arrive.
Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin BTC is up 6% during the same three-month period.
Meanwhile, crypto YouTuber Crypto Rover noted that while it’s not yet Altcoin season, Bitcoin’s dominance is in “top territory,” providing an “accumulation” opportunity for Altcoin investors.
Bitcoin’s dominance — its market share relative to the entire crypto market — suggests that the broader market has been shifting capital away from Altcoin.
According to TradingView data, Bitcoin dominance is near multi-year highs and currently stands at 56.56%, up 3% over the past 90 days.
Altcoin prepare to enter ‘Phase 2’ of cycle
Independent trader Jelle shared a weekly chart of TOTAL3 (the total market capitalization of all cryptocurrencies excluding Bitcoin and Ethereum ETH), noting that the price “successfully” regained a key support area.
The analyst was referring to the area between $600 billion and $625 billion that TOTAL3 flipped from resistance to support after Bitcoin rallied from multi-month lows below $54,000.
"Preparations are being finalized. The second cycle is coming soon."
TOTAL3 market capitalization weekly chart. Source: Jelle
Trader Moustache shares a similar sentiment, observing that the Altcoin market cap retests a key support area, just as it did in 2023, before entering a sustained uptrend that reaches a local high in March 2024.
