Speculation is mounting about whether the altcoin season has begun, as Bitcoin’s dominance struggles to get past the rising wedge.
With Bitcoin still resisting around the $60,000 level, analysts suggest that these conditions could pave the way for the altcoin season.
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Is Bitcoin faltering?
At the time of writing, Bitcoin’s dominance stands at 56.91%. It failed to break through the upper line of the ascending wedge on the fifth of August, and has since been heading downwards.
Failure to break through a rising wedge is usually considered a bearish signal, which means that Bitcoin’s dominance may be at its peak or in decline. With Bitcoin’s weak dominance, altcoins have opportunities to increase their market share. This is what happened with the rise of the TOTAL2 index since the fifth of August.
The TOTAL2 index measures the total market capitalization of the 125 largest altcoins. It was worth $870 billion at the time of writing, up 2% since Bitcoin’s dominance began to decline.
Analyst Chris AI noted that Bitcoin’s dominance encountered strong resistance from a downtrend, preventing it from breaking through the wedge.
Chris AI wrote on the X platform: ‘Bitcoin’s dominance stopped and it couldn’t break through the rising wedge. This is good news for altcoins.’
Another analyst, SenseiBR, noted that Bitcoin’s dominance is nearing the ‘completion of the country pattern’. This term is used in technical analysis to describe a graphical pattern that indicates the likelihood of a trend reversal.
If Bitcoin’s dominance forms a definitive diagonal pattern, this indicates a significant shift in market sentiment. These shifts usually indicate that Bitcoin’s dominance is coming to an end, leading to strong activity in altcoins and an increase in their prices.
Gold is moving near an all-time high. And expectations of rising to this level
Few coins have outperformed Bitcoin
Despite analysts’ positions, it is important to note that the altcoin season begins when at least 75% of the top 50 altcoins have outperformed Bitcoin over the past 90 days. Currently, only 14 altcoins, or 28%, have achieved this.
In addition, the TOTAL2 indicator trades within a horizontal channel on the daily chart. This channel is formed when there is a relative balance between buying and selling pressures, which prevents the price from heading strongly in either direction.
The altcoin season is set to start fully when the TOTAL2 indicator manages to break the upper line of the channel, forming resistance. This breakout will confirm stronger momentum, signaling a shift away from Bitcoin’s dominance and opening the door to growth across altcoins.
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