Global cryptocurrency market is abuzz with speculation as NEAR Protocol (NEAR) price is on a remarkable rally and up 30% today. It’s no wonder that everyone is asking if this uptick is a one-year wonder. They speculate if it indicates the start of a larger altcoin rally, maybe even kicking off “Altcoin Season 2.0.” Anjali Mehra is a DeFi opinion columnist and one of the best explainer video makers I’ve ever met. She explores what this change could mean for investors and what’s fueling this overall positive potential transition.
Signs of Altcoin Momentum in Technical Analysis
Based on the recent performance of the altcoin market, we have a few clues as to whether altcoins still have room to grow or not. Anjali talks about a big change around Altcoin Market Cap. It’s just recently taken out its multi-month downtrend, indicating renewed investor interest, as well as a strong inflow of capital sure to be flowing into altcoins. From here, this breakout acts as a key technical barometer. All traders and analysts use it to determine the overall health and potential of the altcoin market.
Key Indicators Supporting Altcoin Growth
Here are a few leading indicators contributing to the notion that altcoins are on the rise. The CoinMarketCap Altcoin Season Index, a useful metric to gauge whether altcoins are doing better or worse than Bitcoin, is sitting at 37/100. We still are not in full “altcoin season” territory, as that typically takes a reading of 75 or above. That’s the best reading we’ve had in several months, indicating a strengthening trend. ETH/BTC weekly chart Ethereum has increased by 16% against BTC. This is a testament to Ethereum’s relative strength and this makes it one of the most likely candidates to lead an altcoin rally. On Monday, market-wide capitalization climbed to an all-time high of $3.80 trillion. This increase is the first to suggest a definitely positive overall market sentiment, which could further fuel altcoin growth.
Classic Chart Patterns Indicating Potential Breakouts
Market veteran and analyst Peter Brandt has highlighted a cup-and-handle formation in the total market cap of crypto, excluding Bitcoin. This classic chart pattern is widely known for foreshadowing strong bullish movements. It is a sign that the market is boringly consolidating to soon break sharply out of the building triangle. If this trend plays out as predicted, it could be an early indicator of the onset of the next altcoin season. Investors, in their quest for greater returns, are almost certain to dump more capital into altcoins. Brandt’s analysis serves as a very strong technical argument for the altcoin rally to come.
The Role of Bitcoin Dominance in Market Trends
As the leading cryptocurrency by quite a stretch, Bitcoin dominance is a key factor in predicting whether or not altcoins will be running. For those unfamiliar with the term, bitcoin dominance simply means the share of the entire crypto market cap that is composed of bitcoin. When Bitcoin dominance is high, it’s usually an indicator that Bitcoin is performing significantly better than altcoins and when it’s low, the opposite is true.
Current Trends in Bitcoin Dominance
Bitcoin’s dominance (BTC.D) is currently holding the lion’s share, at 62.89%, down from 66% on June 27. A drop in Bitcoin dominance means money is moving into altcoins. Trend #2 Investors are shifting their money from Bitcoin to altcoins. This is a classic indicator of altcoin seasons. According to Samuel Reed, technical analysts project further declines to 59%, as seen in the 2021 cycle's “altcoin season” pattern. A weekly close below the 63.15% support level marked by the May 11 close could extend the declining trend to the 50-week Exponential Moving Average (EMA) at 60.90%. This outcome would increase the likelihood of an altcoin rally.
Implications for Altcoin Performance
This additional context about the recent declining Bitcoin dominance has major implications for recent altcoin performance. As Bitcoin’s dominance declines, altcoins usually outperform Bitcoin on the way up, making bigger percentage profits and pulling up the overall crypto market cap. If Bitcoin continues to maintain above $115,000 long enough, altcoins will still have plenty of room to continue running. This shows the tenuous relationship between the success of Bitcoin and the future of altcoin opportunities. Should altcoins as a group cross a market cap of $2 trillion, the combined crypto market cap would be over $4 trillion. This renaissance would lead to more lucrative investment opportunities and more lucrative returns for the state!
Insights from the Crypto Community
Lastly, the sentiment driving the broader cryptocurrency community is perhaps by far the most important factor steering market trends. Nothing can be further from the truth. These days, social media platforms, and especially Crypto Twitter, are inundated with discussions and predictions about the future of altcoins. Anjali tracks these discussions to take the pulse of sentiment across the board and spot opportunities to engage.
Perspectives from Crypto Twitter
Beyond traditional news sources, our new partnership with Crypto Twitter gives us a leading indicator on market sentiment. With hundreds of thousands of traders and analysts posting their insights and predictions on the platform, it’s a great place to get a real-time pulse on the market. The CMC Fear and Greed Index, a popular sentiment measure, currently sits at 70 — well into greed territory — reflecting a risk-on proclivity in the markets. This is a sign that investors are feeling more confident. Their appetite for risk could really send the altcoin rally into overdrive.
Influencer Opinions on Altcoin Season
Influencer positivity or negativity can make a world of difference in how the public perceives a market trend. When prominent figures in the crypto community express positive views on altcoins, it can attract more investors and drive up prices. Peter Brandt, a veteran analyst, says it's an altseason with a cup-and-handle pattern in sight. This comment adds credibility to the possibility of an altcoin season, encouraging investors to consider altcoin investments.
Future Expectations for Crypto Investors
Going forward, there are some positive macro market developments that may be bullish for altcoins performance. Investors should understand these macroeconomic factors and create game-plans for navigating the potential risks and opportunities it poses.
Potential Market Developments
Ethereum’s price advance is accelerating on the back of a fresh wave of institutional demand. Now investors view it as more than a smart contract platform, as more of an asset that can produce returns, further improved by Layer-2 solutions and primed for ETFs. A continued emergence of institutional interest in Ethereum and other altcoins could result in further price appreciation. With memecoins fading and capital flowing into projects with substance, now is the time to deploy into quality crypto assets before the rest of the herd wakes up. Retrofitting altcoins This infrastructure bill’s move toward supporting quality projects over sheer speculation may just be the catalyst for a productive, sustainable, long-term altcoin rally.
Strategies for Navigating Altcoin Investments
Here are some strategies for investors to consider:
- Diversification: Diversifying your portfolio across multiple altcoins can help reduce risk. Instead of putting all your eggs in one basket, spread your investments across different projects and sectors.
- Due Diligence: Before investing in any altcoin, conduct thorough research on the project, its team, and its potential use cases. Look for projects with strong fundamentals and a clear roadmap.
- Risk Management: Set stop-loss orders to limit potential losses and take profits when your investment goals are achieved. Avoid investing more than you can afford to lose.
- Stay Informed: Keep up-to-date with the latest news and developments in the cryptocurrency market. Follow reputable sources and analysts to stay informed about potential opportunities and risks.
- Long-Term Vision: Adopt a long-term investment horizon and avoid making impulsive decisions based on short-term market fluctuations. Focus on the long-term potential of the projects you invest in.
By adhering to these strategies, investors can increase their odds for success in the altcoin market. They can, if done correctly, chart their way through the danger and towards the promising prospect.
