On December 4, the Altcoin Season Index reached 88, indicating that Cryptocurrencies other than Bitcoin may perform better than the number one digital currency. However, the opportunities of the altcoin season may have suffered a major shock.
However, it seems that this season still has hope to return. Below are three indicators showing that many of the top 50 digital currencies may soon witness significant increases.
Altcoin Pushed Back Again
The altcoin season refers to the period when altcoins outperform Bitcoin in market capitalization growth. The Altcoin Season Index measures this trend, determining whether 75% of the top 50 Cryptocurrencies outperform Bitcoin.
Normally, an index value above 75 signals the start of the altcoin season, while a value of 25 reflects Bitcoin Dominance. However, the index has now dropped to 49, indicating a setback for altcoins as Bitcoin regains a strong position in the market.
But despite the decline, there is no sign that the alt season has ended. One indicator showing this is Bitcoin Dominance.
The increase in Bitcoin Dominance often indicates a growing preference for Bitcoin over altcoins, especially during periods of market instability. This trend suggests that investors view Bitcoin as a safer choice due to its relative stability and established market position.
As dominance increases, interest in smaller Cryptocurrencies may decline, likely leading to a decrease in capital inflows into altcoins. A few weeks ago, Bitcoin Dominance rose to 62%, implying that altcoins may not continue to play a subordinate role.
But at the time of writing, it has dropped to 58.82%, indicating that altcoins have regained a portion of control. If the decline continues, the price of BTC may decrease while the prices of altcoins may surge.
Altcoin Market Capitalization Still Preparing for Growth
The total market capitalization of TOTAL2, which tracks the top 125 altcoins, has recently dropped to $1.35 trillion, indicating that non-Bitcoin assets are underperforming. This decline often signals that the altcoin season may be delayed, with Bitcoin dominating the market.
However, a glimmer of hope has emerged: TOTAL2 has broken out of a descending triangle, signaling the potential for a trend reversal. While the altcoin season may currently face obstacles, this breakout suggests that altcoins could regain momentum if trading volume starts to increase.
If trading volume increases, the market capitalization of TOTAL2 could climb to $1.65 trillion, signaling a revival of the altcoin season opportunities and potentially driving prices higher.
