Is crypto 'altseason' coming? Watch these 3 key signals in the months ahead
Amid Bitcoin’s (BTC) surge toward its all-time high, the cryptocurrency market is watching for signs that altcoin season or "altseason" may soon begin. Defined by a period where alternative cryptocurrencies (altcoins) outperform Bitcoin, altseason can provide considerable returns to investors who enter at the right moment. Crypto traders and analysts are observing three significant signals that could indicate the approach of this long-anticipated phase, with one expert describing the setup as potentially “massive.”
During the last major cryptocurrency bull run, altcoins experienced dramatic gains as BTC’s price action set the stage for an inflow of capital into smaller market cap coins. This year, altcoins have underperformed compared to BTC, as the top cryptocurrency holds the majority of the market’s dominance. However, several recent indicators hint that this trend could be on the verge of reversing. Experts are closely monitoring three key metrics that may signal the start of a substantial altseason.
Altcoin Market Cap on a Strong Trendline
A primary signal for the potential altseason is the altcoin market capitalization, tracked by the TOTAL2 index. TOTAL2, which includes the total market cap of all cryptocurrencies except Bitcoin, is a widely used measure to gauge altcoin market strength. Independent crypto analyst Mags recently highlighted that TOTAL2’s current value is holding firm above a trendline established during the 2017 bull cycle. “The altcoin market cap is currently testing a long-term trendline support that has held strong for the past eight years,” Mags stated on October 26.
This long-standing trendline, having sustained altcoins during previous cycles, has become a point of interest for analysts predicting a bullish move. Mags added that the current retest could mark the end of the prolonged downtrend for altcoins, with buyers stepping in as prices consolidate. This potential “massive move,” as he describes it, depends on TOTAL2 remaining above this critical support level. As BTC’s price flirts with previous all-time highs, the altcoin market could see a comparable push as traders prepare for a shift in momentum.
“If BTC also breaks out, the market looks ready for a massive move,” Mags remarked. At present, Bitcoin’s price is nearing resistance levels set in 2021 at around $69,000. Should BTC close above this price point, it may confirm a shift in the market structure and establish support, which could subsequently trigger an upward trend across altcoins.
In another detailed analysis, crypto analyst Moustache discussed a potential breakout from a descending broadening wedge pattern in the TOTAL2 index. On October 26, he noted that a breakout from this technical setup could be imminent within the next one to two weeks. Moustache observed that TOTAL2 recently dropped from $981 billion to $873 billion, a notable 11% pullback, but he believes this is merely a “deviation” from the longer-term trend. “A monster pump is long overdue for altcoins,” he concluded, suggesting that the altcoin market is due for a significant rally if TOTAL2 reclaims its trendline and confirms a breakout.
Bitcoin Dominance Remains Strong
Bitcoin’s dominance metric, a measure of BTC’s market share compared to the entire cryptocurrency market, remains a crucial factor in determining whether an altseason is likely to begin. Historically, high Bitcoin dominance has signaled a market phase where investors focus primarily on BTC, reflecting a conservative stance within the crypto ecosystem. Conversely, a decline in Bitcoin dominance is usually associated with increased investor appetite for altcoins, often leading to a surge in their values.
As of late October, Bitcoin dominance is at approximately 59.56%, having reached a three-and-a-half-year high of 59.75% just days prior. Popular crypto analyst Crypto Banter has noted that altseason typically kicks in once Bitcoin dominance sees a significant drop. This metric has been on an upward trend since the beginning of 2023, contributing to BTC’s outperformance relative to the majority of altcoins. Yet, some believe that a reversal in this trend could trigger an altseason as capital flows into smaller coins.
An additional viewpoint comes from pseudonymous analyst Yoddha, who recently suggested that Bitcoin dominance is “squeezing” within an ascending wedge a pattern that typically indicates a near-term breakout. He argues that such a pattern could eventually lead to Bitcoin dominance losing ground, paving the way for altcoins to gain momentum. Crypto Rover echoed this sentiment, stating, “Bitcoin dominance is about to crash so hard... altseason is close.” This assessment aligns with the belief that the current dominance levels might signal a peak, as traders begin to look toward altcoins for higher potential returns.
Data from Blockchain Center’s Altcoin Season Index shows that only 29% of the top 50 altcoins have outperformed BTC over the last three months. To confirm a full-fledged altseason, around 75% of altcoins must outperform Bitcoin. This divergence highlights the current strength of BTC within the market and the cautious stance investors have taken in the face of macroeconomic uncertainty and regulatory challenges.
What to Watch in the Coming Weeks
While Bitcoin continues to command the spotlight, certain indicators are worth monitoring for those seeking signs of altseason. The cumulative market cap for altcoins (TOTAL2) is a vital metric; if it maintains or rises above the long-term trendline support, it could be a bullish indicator for the altcoin market. As Mags and Moustache have suggested, TOTAL2’s breakout from its descending wedge could be a catalyst for increased buying interest and, potentially, a rapid upward movement in altcoin values.
Another key factor is Bitcoin dominance. If BTC’s market share begins to decline, as analysts like Crypto Rover predict, it could mark the beginning of a shift in market dynamics. Historically, a fall in Bitcoin dominance has been a strong signal that investors are rotating into altcoins, often sparking a significant rally across the board.
Lastly, the Altcoin Season Index can provide insights into overall investor sentiment regarding altcoins. Should this index approach the 75% mark, signaling a majority of altcoins outperforming Bitcoin, it would be a strong indicator of an altseason. For investors and traders, aligning these metrics with market timing will be crucial to capitalizing on potential gains during this anticipated phase.
With the cryptocurrency market exhibiting mixed signals, many traders remain on the lookout for developments in the BTC and TOTAL2 charts. If both charts confirm breakouts as predicted, the next few months could see a substantial rally within the altcoin sector. Given that Bitcoin remains close to its all-time high, the potential for altseason seems within reach, provided these key indicators align in the weeks ahead.
For now, the market is cautiously optimistic as investors watch for a decisive move that could lead to an altcoin-dominated market cycle. The signals from TOTAL2, Bitcoin dominance, and the Altcoin Season Index will likely serve as leading indicators, guiding traders in their market entries and strategies.
