Since mid-year one of the most recurring topics was the possibility of an altcoin season. One reason the market wanted to assess the probability of an altcoin was the bearishness of the leading altcoins such as Cardano, ETH, Solana and Avalanche, among others.
No question, the pioneering altcoins have not been performing as the market expects. Probably, the success of the meme coins could have disrupted the trends of leading cryptocurrencies. The high number of meme coins has reduced the chance of market dominance by a single asset. Even the Bitcoin dominance is relatively low at the moment. Currently, Bitcoin is trading at $98,967 BTC/USDT on Gate.io
A low Bitcoin dominance plays down the possibility of an altcoin season. This is because in the past the Bitcoin dominance would rise to around 62% before the altcoin season would take over. Thus, a luster Bitcoin performance may not lead to an altcoin season.
At the moment, the Bitcoin dominance is around 59%. Thus, the Bitcoin price should rise higher if an altcoin season has to take place. Probably, Bitcoin should attain a new all-time high at around $99,000. If that happens the Bitcoin dominance would shoot to around 60%.
The Possibility of an Altcoin Season: Technical Indications
We have already noted that the Bitcoin dominance is around 59%, which indicates that an altcoin season is still some months away. Let’s look at the altcoin performance to assess the possibility of an altcoin season.
The current position of Total2, a metric that shows the whole crypto market capitalization except shows a strong bearish outlook. This means that an altcoin season may not occur in the very near future. Currently, a triple top has appeared within a descending Total2 channel. This corroborates the altcoin bearish momentum.
Total2 - Tradingview
The above development shows that the market bearishness wave is intensifying. Therefore, only a change in the whole crypto market sentiment can lead to an altcoin season . Looking at the graph, there is a high chance that Total2 will have a breakdown on the lower side. However, a breakout above the channel may indicate a possibility of an altcoin season.
Bitcoin Breakout Good News for Altcoins
Based on what we have discussed above an upward Bitcoin price rise will be a very positive thing for altcoins. At the moment Bitcoin looks set for a breakout as it targets to overcome the key resistance level at $69,000, its 2021 ATH. If Bitcoin surpasses $69,000 and Total2 rises above the upper trendline that will be a strong indication of a possible altcoin season.
Historically, the previous altcoin season occurred after a strong Bitcoin price surge. In the 2017-2018 cycle the Bitcoin price rose significantly until its dominance reached 62%. After that peak it gradually decreased. In the end, the altcoin bull run started after the Bitcoin dominance fell to 33%. During that period the altcoin ICOs contributed much to the emergence of the altcoin season.
A similar situation occurred during the 2020 to 2021 period. The Bitcoin dominance rose to 70% before falling to 40%. And the greatest trigger for the altcoin was the growth in DeFi and NFTs. In the current scenario, the meme coin hype will likely trigger the altcoin season.
Presently, Bitcoin is trading between $65,000 and $71,000. Thus, it has maintained some price stability within that range. In addition, its price is close to the 10 simple moving average (SMA) and 100 SMA. On the other hand the RSI is indicating an almost neutral position. Notably, the coin is in an uptrend since it gained by 4.15% within the last 24 hours.
Bitcoin 7-Day Price Chart - Coinmarketcap
As seen in the graph, Bitcoin has been in an uptrend for the past week. However, the 1 day price chart shows that the coin is within a range-bound market. Several other technical indicators like the Ichimoku cloud indicate rising Bitcoin bullishness.
Bitcoin Price Action - Gate.io
As the picture above shows, Bitcoin has an RSI reading of 68 and is trending upwards. This is a strong bullish indication. On the other hand, the Ichimoku cloud is green and rising. Another interesting point is that the 50-day EMA has just crossed above the 100-day EMA.
However, the same cannot be said of the number one altcoin - ETH. It is currently within a sideways market and is priced at $2,616 ETH/USDT. What may be pulling ETH down is its low trading volume. However SOL is within a bullish trend as well, showing that some altcoins are currently performing well.
Gate.io P2P: A Key Platform for Trading BTC and ETH
In addition to traditional exchanges, Gate.io P2P provides a decentralized peer-to-peer (P2P) platform for trading various altcoins, including BTC and ETH. The platform offers an efficient way for users to buy and sell altcoins directly with each other using a wide array of payment methods. It provides a more flexible and secure way of trading compared to centralized exchanges, as transactions are conducted through an escrow service that ensures both parties are protected.
For those looking to trade altcoins in a P2P environment, Gate.io P2P offers competitive prices, low fees, and a secure trading experience. With its increasing range of supported altcoins and payment methods, Gate.io P2P is becoming an attractive platform for crypto traders seeking to engage in the altcoin market, especially when Bitcoin's dominance is low.
Role of Market Sentiment in Bitcoin and Altcoin Market Performance
What seems to be holding back the performance of the altcoins and Bitcoin alike is the market sentiment. Right now, the investor risk appetite is very low due to the shift in the global monetary policy. Recent developments have forced investors to invest in less risk assets such as gold. Therefore, unless the economic outlook improves the crypto market will remain depressed. And both Bitcoin and altcoins may not establish true dominance in such a scenario.
