Key altcoin season metric in accumulation mode as Bitcoin dominance peaks
2024.07.26 18:14
The altcoin market is currently at the “reaccumulation stage,” which, after reclaiming a key support area, could move on to the “second leg of the cycle,” according to crypto traders.
“Altcoins are only up 58% since they broke out after 525 days of accumulation,” independent crypto trader Mags said in part of their July 25 post on X.
The accumulation stage occurs when the market has bottomed out, and prices hit local bottoms, as reflected by a 33% drop of TOTAL2 (total market capitalization of all cryptocurrencies, excluding Bitcoin) since March 11. It is marked by a period of relative stability, where investors buy on the dips in anticipation of future price increases.
Mags shared the following chart explaining that despite this correction, altcoins are up 58% since breaking out of a long period of accumulation, suggesting that there is still more room for upside move.
“This pullback is probably just reaccumulation before another leg up.”
TOTAL2 market cap daily chart. Source: Mags
Data from crypto tracking platform Bitformance shows that in the past three months, the top 200 equal weight index — assigning weight equally to cryptocurrencies irrespective of market cap — fell over 55% against the market cap index, where cryptocurrencies are weighted based on their market capitalization.
The fall indicates that smaller cryptocurrencies have displayed weaker performance against Bitcoin, suggesting that the altcoin season is not yet in effect.
Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin (BTC) experienced an ascent of 6% over the same three-month period.
Meanwhile, crypto YouTuber Crypto Rover pointed out that while it is not altcoin season yet, Bitcoin’s dominance is in “its topping region,” giving altcoin investors an opportunity to “accumulate.”
Source: Crypto Rover
Bitcoin’s dominance — its market share relative to the rest of the crypto market — shows the broader market has shifted capital away from altcoins
Bitcoin dominance is nearing a multi-year high, currently at 56.56%, up 3% over the past 90 days, according to TradingView data.
Related: Bitcoin ‘Trump pump’ potential matches key technical signal — Can BTC break $71.5K?
Altcoins prepare for the “second leg” of the cycle
Independent trader Jelle shared a chart of TOTAL3 (total market capitalization of all cryptocurrencies, excluding Bitcoin and Ether (ETH)) on the weekly timeframe and pointed out that the price had “successfully” reclaimed a key support area.
The analyst was referring to the area between $600 billion and $625 billion, which TOTAL3 flipped from resistance to support following Bitcoin’s recovery from multi-month lows below $54,000.
“Preparations are being finalized. The second leg of the cycle is approaching fast.”
TOTAL3 market cap weekly chart. Source: Jelle
Similar sentiments were shared by fellow trader Moustache who observed the altcoin market cap retesting a key support area as it did in 2023 before entering a sustained uptrend that reached a local top in March 2024.
“The most exciting time of the cycle is just around the corner.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
