The altcoin market has been in decline since the 2024 bull market hit a rough patch last March, but there are a number of key indicators that suggest the recent recovery could be a sign of a “big move” to come, according to cryptocurrency analysts.
Are altcoins ready to take off?
From a technical perspective, the altcoin market setup shows strength, maintaining an upward trend line supporting TOTAL2, the cumulative market capitalization of all cryptocurrencies except Bitcoin (BTC) since the 2017 bull cycle.
“Altcoin market caps are currently testing long-term trendline support that has remained strong for the past eight years,” independent cryptocurrency analyst Mags declared in an October 26 post on X.
A retest of this multi-year support level is a bullish indicator that the downtrend is easing, and increased buying from current levels could push the altcoin price higher.
“With BTC also launching, the market appears poised for a huge move,” the analyst added.
“It’s time to send it higher.”
At the time of publication, the price of Bitcoin was finding resistance at around $69,000, its 2021 all-time high.
If BTC price hits a decisive close above this level and TOTAL2 remains above the long-term trendline support, it could be a sign that the market is ready for a big move higher.
Altcoin market capitalization. source: mag
Meanwhile, fellow analyst Mustache noted that we should watch for a breakout of the widening wedge.
“Within the next week or two, TOTAL2 will be forced to break out of its 7.5-month downward expanding wedge,” Mustache explained in an October 26 post to X.
According to Mustache, the recent 11% decline in TOTAL2 between October 21 and October 25, from $981 billion to $873 billion, is “just because the price is fighting to regain the trend line that has served as support since September 26.” It may be a “deviation”.
“A monster pump for altcoins is long overdue.”
TOTAL2 daily chart. source: mustache
It’s still Bitcoin season
Bitcoin dominance (a metric that measures Bitcoin’s market share relative to the overall cryptocurrency market) is one commonly used indicator to indicate whether an alt season has begun. This can provide traders with the overall sentiment and risk appetite of the market.
This indicator has been on the rise since early 2023, reaching 59.75 on October 25, hitting the highest level in three and a half years.
As of the time of announcement, BTC dominance is maintaining an upward trend at 59.56%, indicating that it is still ‘Bitcoin season’.
Bitcoin market dominance. source: TradingView
Crypto Banter, a popular cryptocurrency YouTuber, says that a significant drop in Bitcoin dominance could lead to a “parabolic” alt-season phase.
Anonymous cryptocurrency analyst Yodha has claimed that Bitcoin dominance could be “squeezed” inside a rising wedge, signaling an altcoin rally is imminent.
source: yoda
“Bitcoin dominance is too close to collapse,” fellow analyst Crypto Rover wrote in an Oct. 28 post on X, adding, “Altison is close.”
Meanwhile, the current level of Bitcoin dominance means that altcoins still underperform BTC.
According to data from the Blockchain Center, only 29% of the top 50 altcoins have surpassed BTC over the past three months, which is a far cry from the 75% needed to have an official “altszn”.
Altcoin Seasonal Index. Source: Blockchain Center
As Bitcoin challenges new records, market participants will be watching for a possible TOTAL2 market cap breakout, which could reduce Bitcoin dominance and boost the altcoin season index. If all of this matches up, it could signal the start of altcoin season in the coming months. .
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.