Over time, Ethereum, the second-largest cryptocurrency and most significant altcoin, has frequently led an Altcoin Season because of its remarkable performance following market transitions from a Bitcoin season to an altcoin season in every bullish market cycle. Despite the declining performance of Bitcoin, the premier altcoin, an altcoin season still appears probable in the near future.
Is An Altcoin Season Approaching?
Given the increased volatility and BTC’s strong market superiority, the chances of an Altcoin Season occurring in this cycle seem minimal. However, on-chain specialist and CEO of Alphractal Joao Wedson asserts that this enduring Bitcoin’s dominance could be setting the stage for a significant altseason in the not-too-distant future. Historically, altcoin seasons have followed times of Bitcoin dominance.
Joao Wedson pointed out that Ethereum’s diminishing performance has constrained other altcoins in the current market cycle, yet an altcoin season “is merely a matter of time.” As the altcoin market fights to regain dominance with ETH encountering obstacles, traders are optimistic for a change that could stimulate renewed growth across the altcoin landscape.
In the X post, Wedson explored altcoin market dominance alongside Ethereum, uncovering an intriguing pattern. The expert noted that altcoin dominance is diminishing, whereas altcoin dominance excluding Ethereum and Stablecoins has remained stagnant and in a neutral range since late 2022.
This trend suggests that Bitcoin has siphoned off a substantial portion of Ethereum’s market capitalization. Currently, Bitcoin’s superiority has escalated to 62%, with BTC and Stablecoin’s dominance climbing to almost 71%. In contrast, Ethereum and all other altcoins hold only 29% of the overall market.
Bitcoin and Stablecoin dominance might appear to pose a hindrance to the forthcoming altcoin season. Nevertheless, the intriguing aspect is that the greater the rise in BTC and Stablecoin dominance, the more vigorous the upcoming altcoin season will be, which Wedson posits is merely a matter of time.
BTC And Stablecoins Taking Center Stage
Daan Crypto Trades, a technical analyst and trader, has also offered observations on the matter, emphasizing that the altcoin market capitalization has plummeted, resulting in a decline in altcoins’ dominance. Although it was progressing positively for a time, the consistent ascent of Bitcoin and Stablecoins has placed altcoin dominance under significant pressure within the cryptocurrency market.
Due to the dilution among them, individual altcoins have performed poorly. Therefore, for altcoins to reclaim dominance over Bitcoin, Stablecoins, and other major assets, the ETH/BTC pair must gain some traction beforehand.
Daan Crypto Trades asserts that Ethereum frequently plays a crucial role in enhancing the overall altcoin performance. This is due to the fact that numerous liquidity pools are denominated in ETH, and most coins are created on this platform. Hence, for altcoins to flourish, the wealth effect on ETH and significant cryptocurrencies is essential.
Until this is the scenario, the analyst advises investors to refrain from entering the market. Even though altcoin rallies are typically brief, there is often a high timeframe retest. Once it becomes clear that the trend is altering, Daan Crypto Trades believes this is the opportune time to engage in the market.
Featured image from Unsplash, chart from Tradingview.com
Editorial Process for bitcoinist focuses on delivering well-researched, precise, and impartial content. We maintain strict sourcing protocols, and every page goes through thorough scrutiny by our team of leading technology specialists and experienced editors. This approach guarantees the integrity, relevance, and worth of our material for our audience.
