According to cryptocurrency traders, the altcoin market is currently in a “reaccumulation phase” and could move into the “second phase of the cycle” after reclaiming key support areas.
“Altcoins are only up 58% since their 525-day accumulation and subsequent explosion,” independent crypto trader Mags wrote in a July 25 post on X.
The accumulation phase occurs when the market bottoms and prices hit a local floor, as evidenced by the 33% drop in TOTAL2, the total market cap of all cryptocurrencies except Bitcoin, since March 11. This is characterized by a relatively stable period where investors buy when prices drop in anticipation of future price increases.
Despite this correction, Mex shared the following chart, which shows that the altcoin is up 58% since breaking out of its long-term accumulation, suggesting there is still plenty of room to go up.
“This sell-off is probably just a replenishment before the next rally.”
According to data from Bitformance, a cryptocurrency tracking platform, the top 200 equal-weighted index, which gives equal weight to all cryptocurrencies regardless of market cap, has fallen 55% over the past three months compared to the market cap index, which weights cryptocurrencies based on their market cap.
This decline shows that smaller cryptocurrencies have underperformed Bitcoin, suggesting that altcoin season has not yet begun.
According to data from Cointelegraph Markets Pro and TradingView, Bitcoin (BTC) experienced a 6% gain over the same three-month period.
Meanwhile, crypto YouTuber Crypto Rover noted that while it is not yet altcoin season, Bitcoin’s dominance is in “peak territory,” which presents altcoin investors with an opportunity to “accumulate.”
Bitcoin’s dominance (market share relative to the rest of the cryptocurrency market) shows that the broader market has shifted capital away from altcoins.
According to TradingView data, Bitcoin dominance is currently at 56.56%, nearing its highest level in years and up 3% over the last 90 days.
Related: Bitcoin ‘Trump Pump’ Possible Coincidences Key Technical Signals – Can BTC Break $71,500?
Altcoins prepare for the “second phase” of the cycle.
Independent trader Zell shared a weekly TOTAL3 (total market cap of all cryptocurrencies except Bitcoin and Ether (ETH)) chart and noted that the price “successfully” reclaimed a key support area.
The analyst said TOTAL3 cited the area between $600 billion and $625 billion as a potential resistance-to-support level as Bitcoin recovered from its multi-month low of $54,000.
“Preparations are being finalized. The second phase of the cycle is rapidly approaching.”
Similar sentiments were shared by another trader, Moustache, who observed that altcoin market caps retested key support areas, much like they did in 2023, before entering a sustained uptrend that reached a local peak in March 2024.
“The most exciting time of the cycle is just around the corner.”
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.