Altcoins Could Spark an Altseason as Bitcoin Dominance Declines
The cryptocurrency market is shifting its focus to altcoins following Bitcoin’s recent surge. This shift could potentially lead to what traders refer to as an altseason, where altcoins outperform Bitcoin. Although Bitcoin has maintained dominance over other cryptocurrencies, its dominance index has started to decline from a peak of 55.35% to 53.42% at the time of writing.
Altcoin Market Cap Breaks Out of Accumulation Phase
An analyst named Jelle has identified a breakout in the altcoin market cap, signaling the end of an accumulation phase. The analyst shared this analysis on X (formerly Twitter) on December 8, highlighting that altcoins are now in a “retest” range after being capitalized at $723 billion. If historical patterns repeat themselves, this retest phase could lead to the next altseason, with the altcoin market cap surpassing $1.8 trillion.
However, there is a possibility that the retest fails and the index returns to the accumulation phase, which would invalidate Jelle’s analysis and delay the expected altseason.
Be Prepared for Volatility and Adaptability
It’s important to remember that the cryptocurrency market is highly volatile and unpredictable, especially when it comes to altcoins due to their lower liquidity. As a crypto trader or investor, it’s crucial to be able to adapt and manage risks effectively based on market signals.
Hot Take: Altseason on the Horizon?
The decline in Bitcoin dominance and the breakout in altcoin market cap suggest that an altseason may be on the horizon. If historical patterns hold true, we could see a significant surge in altcoin performance and market capitalization. However, it’s essential to remain cautious as the market can be unpredictable. Keep a close eye on these developments and be prepared to adjust your investment strategy accordingly.
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