The cryptocurrency market is buzzing with speculation about the potential for a new altseason, as highlighted by analyst Moustache. Historically, significant shifts in Bitcoin dominance have often heralded a period where altcoins outperform Bitcoin. This cycle of dominance shifts has been a recurring theme in past alt seasons, creating a pattern many investors are closely watching for signs of a repeat in 2024.
A closer look at Bitcoin’s dominance reveals intriguing patterns. The chart tracking Bitcoin dominance over several years highlights notable drops during previous altseasons. Specifically, a substantial decline in Bitcoin dominance in 2017, 2020, and 2021 signalled a strong altcoin performance. As Bitcoin’s share of the total cryptocurrency market cap decreased, altcoins surged, showcasing their relative strength.
Currently, the chart suggests a similar scenario might be unfolding. Bitcoin dominance is approaching levels seen before previous altseasons. The Moving Average Convergence Divergence (MACD) indicator, which assesses momentum, is nearing a crossover point that historically aligns with these altcoin rallies. This potential crossover could indicate a shift in market sentiment, signaling a bullish trend for altcoins.
Bitcoin Dominance Hits Resistance, Altcoins Set to RallyFurthermore, examining the altcoin market cap provides additional insights. As further noted by Mags, an analyst, the altcoin market has consistently tested a long-term trendline support that has been reliable over the past seven years. Each time this trendline has been tested, it has triggered a significant upward movement in altcoin prices. This trendline has acted as a key support zone, reinforcing the potential for future gains if this pattern continues.
The current trend also shows that after a period of downtrend and consolidation, altcoin prices are poised for a breakout. The previous accumulation phases and resistance levels around the $100 billion mark and the $1.7 trillion mark indicate critical points of interest. If the trendline continues to hold as support, and if resistance levels are overcome, altcoins could see substantial gains.
The projected path for altcoins suggests a potential breakout from the current accumulation phase. This scenario aligns with past patterns where significant support at the trendline led to notable price increases. However, higher-level resistance, such as $3.1 trillion, could pose challenges for further gains.
