Bitcoin’s (BTC) dominance, the metric that gives a sense of the coin’s value relative to other cryptocurrencies, reached a yearly high of 57.70% on August 9. This happened as BTC’s price recovered from its earlier slip below $50,000.
However, at press time, BTC.D, as it is commonly called, has dropped, driving speculation that altcoin season could be close.
Bitcoin Dominance Weakens Despite Its Recent Milestone
Altcoin season is a short period when 75% of the top 50 non-BTC cryptos outperform the number one cryptocurrency. For this to happen, Bitcoin dominance has to drop, and the TOTAL2 market cap must consistently increase.
TOTAL2 is the sum of the market cap of the top 125 altcoins. At press time, Bitcoin dominance has fallen to 56.95% while the TOTAL2 has increased to $890.18 billion.
A few months ago, many altcoins, led by Ethereum (ETH), saw double-digit price increases. However, the rally was short-lived. Additionally, the launch of spot Ethereum ETFs has not delivered the anticipated results, particularly as the TOTAL market cap remains below $1 trillion at press time.
Bitcoin Dominance Against Altcoins Market Cap. Source: TradingView
More notably, Bitcoin’s price has dropped below $60,000, currently trading at $58,188. This decline has reignited discussions, especially on X, with many speculating that altcoin season could be approaching.
For instance, crypto trader Zen opined that this week could be bullish for altcoins as long as BTC trades between $53,500 and $60,800.
“This week might be bullish for alts. At least against $BTC. For that scenario to be valid Bitcoin should stay more or less stable within 53.5-60.8k range,” Zen wrote on X.
Furthermore, recent events suggest that Zen’s opinion may be valid. According to Lookonchain, institutions whose buying power has been vital to BTC’s price have refrained from buying the coin.
Bitcoin Institutional Transactions. Source: Lookonchain
This is happening despite institutions having access to a large number of stablecoins just days ago. If these institutions stop accumulating, Bitcoin’s dominance could decline even further.
Alt Season Set to Take the Lead?
Meanwhile, the TOTAL2 daily chart shows that it is breaking out of the descending trendlines. As seen below, the value hit a series of Lower Lows (LL) between May and early August.
For context, a lower low occurs when a cryptocurrency’s price falls to a new low below its previous one, signaling a continued downtrend. However, at press time, the altcoin market has reached a Lower High (LH), indicating that a significant uptrend could develop if this momentum persists.
TOTAL2 Daily Analysis. Source: TradingView
However, if Bitcoin bulls come into the picture with another round of accumulation, the prediction may be invalidated, and altcoin season may not come to pass.
Conclusion: What Lies Ahead for Bitcoin and Altcoins?
As Bitcoin’s dominance weakens and the Total2 market cap increases, the possibility of an altcoin season gains momentum. With institutions refraining from buying Bitcoin despite ample stablecoin resources, the stage is set for altcoins to potentially outperform the leading cryptocurrency.
While analysts like Zen remain bullish on altcoins as long as Bitcoin’s price range stays stable, the dynamics of the market are ever-changing. The breakout of Total2 above descending trendlines and the shift from Lower Lows to a Lower High suggest a potential uptrend for altcoins.
Whether alt season takes the lead or Bitcoin’s dominance strengthens once again hinges on market movements and institutional behavior. As traders and investors closely monitor these developments, the crypto landscape remains dynamic and full of opportunities.
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