Bearish Bitcoin Dominance Signals Potential Altcoin Season Ahead
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Recent volatility in Bitcoin's dominance could indicate that an altcoin season is approaching sooner than many traders expect. According to crypto analyst Matthew Hyland, the Bitcoin dominance chart has shown bearish trends for several weeks.
He noted in an X post that the current relief rally might be nothing more than a dead cat bounce in a broader downtrend. Hyland also suggested that the recent fluctuations in Bitcoin's price may have been manipulated by traditional finance giants, implying that Wall Street is trying to set itself up for future gains.
Currently, Bitcoin dominance is at 59.90%, down 5.13% over the past six months. Bitcoin has faced challenges recently, slipping below the $100,000 mark for the first time in four months, with its price sitting at $102,090 at the time of publication.
Over the past 30 days, Bitcoin has experienced a decline of 15.65%. Despite Hyland's optimism regarding altcoins, other indicators still reflect a market primarily focused on Bitcoin, with CoinMarketCap's Altcoin Season Index currently at 28 out of 100, indicating Bitcoin Season territory.
The last time the index suggested an Altcoin Season was on October 8, shortly after Bitcoin reached a new all-time high of $125,100. However, this anticipation was quickly dashed following a market crash that resulted in the loss of around $19 billion in leveraged positions.
Some crypto executives predict that the next altcoin season might be more selective than previous cycles. Maen Ftouni, CEO of CoinQuant, remarked that older cryptocurrencies expected to receive exchange-traded funds, or ETFs, will likely absorb much of the capital during the next altcoin season.
He emphasized that not all altcoins will experience massive returns, and liquidity will likely concentrate in a few select projects, particularly established ones. This insight highlights the shifting dynamics within the crypto market and the potential for investors to capitalize on upcoming opportunities in altcoins while being aware of the risks involved.