On December 4, the altcoin season index reached 88, suggesting that cryptocurrencies other than Bitcoin may perform better than the leading cryptocurrency. However, the opportunity for the altcoin season has suffered a major shock.
Nevertheless, it appears that the long-awaited altcoin season may still have the potential to return. Below are three signs that many of the top 50 cryptocurrencies may soon witness significant growth.
The altcoin season is a period when altcoins outperform Bitcoin in terms of growth. The altcoin season index measures this trend, determining whether 75% of the top 50 cryptocurrencies are outperforming Bitcoin.
Typically, an index value above 75 indicates the start of the altcoin season, while a value of 25 reflects Bitcoin's dominance. However, the index has now dropped to 49, suggesting a retreat of altcoins as Bitcoin regains a stronger position in the market.
Despite this decline, the altcoin season does not appear to be over. One indicator for this is Bitcoin's dominance rate.
An increase in Bitcoin's dominance rate often points to a growing preference for Bitcoin over altcoins, especially during uncertain market periods. This trend suggests that investors view Bitcoin as a safer choice, thanks to its relative stability and established position in the market.
As the dominance rate rises, interest in smaller cryptocurrencies may decline, leading to a potential decrease in capital inflows into altcoins. A few weeks ago, Bitcoin's dominance rate climbed to 62%, indicating that altcoins may no longer play a secondary role.
However, at the moment, this index has dropped to 58.82%, suggesting that altcoins have regained a portion of their market share. If this decline continues, BTC prices may decrease, while altcoin prices may surge.
The TOTAL2 market capitalization, which tracks the top 125 altcoins, has recently dropped to $1.35 trillion, indicating that assets outside of Bitcoin are underperforming. This decline often signals a delay in the altcoin season, as Bitcoin dominates the market.
However, there is still hope when TOTAL2 breaks through a descending triangle, signaling a potential trend reversal. Although the altcoin season may face challenges at the moment, this breakout suggests that altcoins may regain momentum if trading volume starts to increase.
If this volume increases, the TOTAL2 market capitalization could reach $1.65 trillion, marking the revival of the altcoin season and potentially driving the value of these coins to higher levels.
You can view coin prices here.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do their own research before making decisions. We are not responsible for your investment decisions.
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