The cryptocurrency market attention is now turning to altcoins after a massive surge of the leader Bitcoin (BTC). This shift could ignite what traders usually call an altseason, with altcoins outperforming BTC.
So far, Bitcoin has increased its dominance over the other cryptocurrencies. However, the Bitcoin Dominance (BTC.D) index peaked at 55.35% and turned to the downside, at 53.42%, by press time.
Bitcoin Dominance Index (BTC.D), 4-hour chart. Source: TradingView
Previously, BTC.D reaching new highs and retracing has signaled the start of altseasons. This happens because capital first flows to Bitcoin in bull markets. Consequently, traders then turn part of their profits into altcoins, boosting their highly volatile market caps.
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Altseason: Altcoin total market cap breaks out accumulation phase
In particular, crypto and stocks analyst Jelle spotted an altcoin’s market cap breakout of an accumulation range. Jelle shared this analysis on X (formerly Twitter) on December 8, showing the range that dates from 2022.
The #altcoins market cap has broken out of the accumulation range ?Will we get such an altseason again? pic.twitter.com/HqsVGrDEAE
— Jelle (@CryptoJelleNL) December 8, 2023Notably, altcoins were capitalized at $723 billion in the aforementioned chart. According to the technical analyst, they are now trading in a “retest” range.
If the last cycle’s pattern takes place, this current retest phase can ignite the next altseason phase. Interestingly, Jelle expects the altcoin’s market cap to reach new highs, surpassing the $1.8 trillion capitalization.
However, it is possible that the retest fails and the index gets back to the accumulation phase. It is important to understand that such a retrace would invalidate Jelle’s analysis, delaying the expected altseason.
The cryptocurrency market is volatile and unpredictable, which intensifies on altcoins due to their lower liquidity. Therefore, crypto traders and investors must be able to change and adapt according to the signals, with proper risk management.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
