08 Nov 2023
Bitcoin is up, is altseason coming?
Currently, with Bitcoin's dominance showing signs of a downtrend, the market may be at the cusp of another AltSeason. This is when investors begin to diversify their portfolios with altcoins in search of higher returns.
In the last 30 days, Bitcoin has surged by 28.7%, there is a lot of excitement surrounding the potential approval of a Bitcoin ETF. This bullish sentiment is reflected in the CME Open Interest, where traditional finance (TradFi) trades Bitcoin, which saw a substantial increase and now nearly matches Binance at $3.92 billion.
Currently, Bitcoin is testing its monthly resistance, and from an my point of, the market could go in one of two bullish directions: we might enter the summer 2021 trading range between $41k and $28k, or we could experience a swift rally to $45k within now and the ETF approval.
The bearish counterpoint would be a retraction back to the $32k level. In the wake of such a breakout, it is advantageous not to give sidelined investors a comfortable entry point for long positions. The strategy is to induce FOMO, compelling market participants to buy at elevated prices, thereby fuelling a self-reinforcing ascent in Bitcoin's price.
As Bitcoin consolidates, the question of when AltSeason arrises. AltSeason is period characterized by a surge in altcoins as capital flows from Bitcoin into these alternative assets, we often see this by the decline in Bitcoin's dominance.
Bitcoin dominance, a metric that gauges Bitcoin's market capitalization relative to the total crypto market cap, has been on an upward trajectory since the beginning of 2023, even surpassing the 50% mark for the first time in years, peaking at 55%. This rise in dominance typically dampens expectations for an AltSeason, as it suggests a market heavily weighted in favor of Bitcoin. However, despite this, some altcoins with robust fundamentals have already begun to outperform, hinting that an AltSeason may be quietly unfolding.
In the last 14 days, Bitcoin dominance has started to peel back. We have seen altcoins like Solana, Bittensor, Injective, and Kujira thriving, showcasing significant resilience and growth. These coins have managed to carve out a niche for themselves, backed by strong use cases and community support.
So the question still isn't answered: when is Altseason starting? Well, it's already started—the assets mentioned above are all up over 80% in the last 30 days. More altcoins are starting to catch a bid, and we will see more and more alts ascend to higher market caps. We will see large pullbacks and leverage wipes this altseason.
That's why the concept of Bitcoin dominance is pivotal to understanding market dynamics. When Bitcoin's dominance falls, it often indicates that investors are looking beyond Bitcoin, venturing into the realm of altcoins. This shift can lead to substantial gains for these alternative assets, as was witnessed during the early 2021 bull run.
The recent surge in Bitcoin's price has u reinvigorated the crypto market, sparking discussions and speculation about the potential for a new Altseason. As Bitcoin's dominance begins to fall, the spotlight shifts to altcoins, particularly those anchored by solid fundamentals and innovative use cases. This shift marks the start of an Altseason.
The price action suggests that Altseason has already commenced, with several altcoins experiencing significant appreciation in value, indicating a broader market movement towards higher market caps for these alternative assets.
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