Is Altcoin season coming?

While BTC continues to consolidate below its record high, the broader cryptocurrency market has maintained a bullish outlook, amid strong gains in major altcoins, including ETH, XRP, Solana, and BNB. 

Altcoin season has remained elusive until now, as BTC has dominated, determining the direction of the broader crypto market. Institutions have been focused on Bitcoin through spot ETFs and corporate treasury adoption. However, a shift appears to be underway as more altcoins play catch-up.  

Altcoins outperform 

After hitting a record high of 123k, Bitcoin is trading in a tight range around 118k-120k. It trades up 10% in July but has remained unchanged over the past 10 days. In comparison, Ethereum has rallied 25% over the past 10 days and is currently trading 48% higher in July alone. Meanwhile, XRP has rallied 26% in 10 days, taking the price to record highs above $3.60. Like XRP.  Solana trades 26% higher over the past week and a half, breaking above $200, and BNB hit an all-time high of 804, taking the market capitalisation above $110 billion. 

Layer-1 blockchain tokens are leading the rally, which suggests a greater focus on projects with real utility. Institutional and corporate demand are adding to momentum. ETH ETFs have stolen the show, with a record-breaking $2.12 billion in inflows last week, almost doubling its previous record. 

The big picture Altcoin cycle 

This adds to evidence that we are moving towards altcoin season. The cycle begins with Bitcoin Dominance, followed by an Ethereum Season when liquidity shifts into Ethereum. This is followed by large-cap altcoins, before the full risk-on Altcoin Season, when low-cap alts experience a wild phase. 

Altcoin Season Index rises & Bitcoin dominance crashes 

The Altcoin Season Index (ASI) has risen to 56, up significantly from 38 last week and up from 16 a month ago. This means that 54 of the top 100 altcoins have outperformed Bitcoin over a 90-day period. When the ASI reaches 75, altcoin season has arrived.  

Another indicator, Bitcoin dominance in the cryptocurrency market, is also showing signs that altcoin season could be nearing. If Bitcoin dominance were at 100%, nearly all the money is concentrated in Bitcoin alone. When this dominance begins to wane, it signals that capital is shifting out of BTC and into altcoins.  

Bitcoin dominance has fallen to its lowest level since March, dropping by almost 6% last week, indicating that traders are increasing their focus on the broader cryptocurrency market. 

Bitcoin dominance is now at just under 61% a level last seen in March after recording its biggest slide since June 2022. Over the past seven days, BTC has remained relatively flat, while the total crypto market capitalization has risen to $3.9 trillion, up from $3.09 trillion just a month ago. 

ETH technical analysis 

ETH broke out above the 2750 resistance, surging 24% in a week before running into resistance at 3800. The price has eased back slightly, although the RSI remains well overbought, so a deeper pullback or consolidation could be on the cards. 

Buyers will look to extend the uptrend towards 4000 and 4100, the 2024 high. 

Support can be seen around 3000, the psychological level, and the 61.8% Fib retracement of the 4100, 2024 high and the 1383, 2025 low. A break below 2750 is needed to negate the uptrend. 

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