Why the Altcoin Season May Be Underway
The cryptocurrency market is showing signs that altcoin season is coming, a period characterized by surges in the price of other assets relative to Bitcoin. During this period, market participants have often turned their attention and capital to altcoins.
Some key indicators are starting to indicate that market dynamics are gradually shifting. This analysis delves into some of these factors.
Altcoin season may be coming
One of the indicators is TOTAL3 is on the risea metric that tracks the total market capitalization of all cryptocurrencies, excluding Bitcoin and Ethereum. As of this writing, that number stands at $933 billion, a 35% surge since the beginning of the month. For context, the market capitalization of this group of assets has increased by $212 billion over the past 22 days.
With TOTAL3 approaching its all-time high of $1.13 trillion, this suggests that investors are allocating more funds to altcoins. Notably, TOTAL3’s rise occurred during a period of consolidation of Bitcoin dominance (BTC.D).
Its daily chart shows that BTC.D has been trading between 61% and 58% since November 8. At the time of writing, BTC.D is trading at 59.30%.
When TOTAL3 spikes while BTC.D consolidates, it’s a great indicator of a potential altcoin season. This means that investors are shifting their focus from Bitcoin to other cryptocurrencies, leading to increased demand and Altcoin prices may be higher.
In addition, in the new ReportOn-chain data provider CryptoQuant has noticed that multiple layer 1 altcoins have increased in value since the conclusion of the U.S. presidential election, confirming that a potential altcoin season may be upon us.
“Cryptocurrencies like XRP, TRX (Tron), TON, ADA and Sol Their prices have risen sharply in anticipation that the new U.S. administration will be more supportive of cryptocurrencies. ” said CryptoQuant.
Furthermore, CryptoQuant explained that the surge in spot trading volume was accompanied by a spike in price.
“Daily altcoin spot trading volume increased after the U.S. presidential election and surged to $18 billion on November 11, the highest level since early August. Prior to this, altcoin spot trading volume had increased since May Staying down.”
Altcoins may need more time
While readings from the above indicators suggest that an altcoin season may be underway in the near future, it is worth noting that this will be confirmed when at least 75% of the top 50 altcoins outperform Bitcoin over a three-month period.
However, data from Blockchain Center shows that only 43% of these top altcoins have outperformed Bitcoin over the past 90 days – significantly lower than Requires 75% threshold Altcoin season is officially announced.
Disclaimer
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