With Bitcoin (BTC) unable to escape its uptrend, speculation is growing as to whether altcoin season has begun.
As Bitcoin faces ongoing resistance near $60,000, analysts say this could signal the start of altcoin season.
Bitcoin’s Dominance Wanes
At the time of writing, BTC.D’s share stands at 56.91%. It failed to break through the upper line of the rising wedge on August 5, resulting in a downward trend since then. The inability to break out of the rising wedge is considered bearish, suggesting that Bitcoin’s dominance may have peaked or is on the decline. This decline in dominance opens up opportunities for altcoins to gain market share, as seen with the rise of TOTAL2 since August 5th.
TOTAL2 measures the total market capitalization of the top 125 altcoins and currently stands at $870 billion, marking a 2% increase since the downtrend began.
The Speculation Intensifies
Bitcoin’s recent movements have sparked speculation among cryptocurrency analysts. Chris AI noted that Bitcoin’s dominance failed to break out of the wedge due to strong resistance on the downtrend, fueling further speculation. According to Chris AI, this failure could signal a rollover in the near future, which would be favorable for alternative investors.
“Bitcoin’s dominance stalled at a large downward sloping trendline, failing to break out of a rising wedge. This is good news for alternative investors as it increases the likelihood of a rollover in the near future,” ChrisAI wrote for X.
Another analyst, SenseiBR, mentioned that BTC.D appears to be “ending diagonally,” a technical analysis term indicating a potential trend reversal. If BTC.D forms an ending diagonal pattern, it could signify a significant shift in market sentiment, potentially leading to a surge in altcoin activity and higher prices.
The Road to Altcoin Season
Despite the speculation, it is essential to note that an altcoin season typically begins when more than 75% of the top 50 altcoins outperform Bitcoin over the past 90 days. Currently, only 14 altcoins, or 28%, have achieved this level of outperformance. Additionally, the TOTAL2 trend on the daily chart is within a horizontal channel, indicating balanced buying and selling pressure that limits significant price movements in one direction.
The official start of the altcoin season will occur when TOTAL2 successfully breaks out of the resistance forming the channel cap. This breakout will confirm stronger momentum, signify a departure from Bitcoin’s dominance, and create room for other cryptocurrencies to flourish.
