Altcoin
Altcoin season depends on Bitcoin’s consolidation below $65K – Why?
Altcoins are midway through a robust season, propelled by Bitcoin’s impending consolidation.
- Altcoin season experienced a surge in value during the recent bull rally, driven by BTC testing the $66K.
- However, a crucial factor is needed to trigger the onset of an altcoin season.
Bitcoin [BTC] is poised for a potential price correction after failing to sustain its $66K level. AMBCrypto’s analysis suggests that $61K could serve as the next support, marking a key bottom.
Historically, altcoin seasons follow Bitcoin’s bottoming. If this pattern repeats, the current dip could trigger the next Altcoin Season.
The next cycle could spark altcoin season
Currently, Bitcoin’s market share stands at 57.37%, a significant decline from its recent peak of 58.59% just ten days ago. This falling dominance may indicate growing confidence in altcoins.
The rationale is clear, two days ago, BTC tested the $66K ceiling after a steady uptrend, allowing many stakeholders to take profits. Their exit could mark the next bottom.
Additionally, this dip may attract renewed interest from holders, setting the stage for potential altcoin growth.
Source: BlockChainCenter.Net
At present, 17 of the top 50 coins are ranked above Bitcoin, resulting in a 34% altcoin dominance.
With many altcoins exhibiting bullish momentum during the recent rally, another cycle may be needed to catalyze the onset of the next altcoin season.
So, keeping an eye on the upcoming Bitcoin cycle is crucial to figuring out when these coins might start to rally. In simple terms…
Bitcoin consolidation might be the key
While the market euphoria hints at a bullish start for Bitcoin in October, the daily price chart tells a different story.
If the mid-July rally repeats – where BTC bulls held off resistance at $66K and broke through to $68K – Bitcoin dominance might be reinstated, dampening the prospects for an altcoin season.
However, the sharp drop in RSI indicates a loss of buying momentum. If Bitcoin enters a consolidation phase, it could allow major altcoins to take the spotlight.
Additionally, rising USDT outflows suggest that more stablecoins are being withdrawn from exchanges.
Source: Glassnode
Historically, such withdrawals often coincide with Bitcoin losing a major resistance zone, prompting investors to turn to USDT as a safe bet.
Furthermore, these investors see altcoins as more attractive assets while waiting for Bitcoin to dip.
As a result, liquidity flows into altcoins, which are viewed as cheaper alternatives, especially during increasing volatility.
In short, if BTC consolidates around $64K or below, investors may diversify their portfolios, potentially causing altcoins to soar.
The season may be within reach
Aside from market sentiment, AMBCrypto identified a hidden pattern in historical trends.
Interestingly, when BTC dominance bottomed six years ago, a reversal occurred 761 days later, marking the start of the altcoin season.
Put simply, this pattern suggests that a similar timeline could signal the next altcoin season soon.
Source: X
In other words, if Bitcoin dominance is currently declining, it could eventually lead to a resurgence in altcoin values if history repeats itself.
Read Bitcoin’s [BTC] Price Prediction 2024-25
As previously mentioned, the current market conditions signal an optimal time for altcoins to surge, driven by declining Bitcoin dominance, increasing USDT outflows, and a historical pattern supporting this event.
Overall, keeping an eye on these factors is crucial. If BTC slips into consolidation – which seems likely – the next altcoin season could be triggered.
