Altcoin season: 60% BTC dominance is DECISIVEThe bitcoin price continues to develop its upward trend this summer and the end of the cycle is approaching, the cycle linked to the halving of the year 2024 and which began in November 2022. It's usually in the latter part of the cycle that we can observe a rotation of capital in favor of altcoins, creating a period when altcoins do better than BTC in terms of price evolution.
In this new analysis, I present you with two major barometers that must be followed if we are to envisage the next start of a favorable sequence for altcoins.
Before doing so, I invite you to reread my last proposed analysis of the bitcoin price (by clicking on the first chart below) with the likely technical target for BTC at the beginning of September.
1) Bitcoin's 60% dominance threshold plays a decisive role in indicating whether or not there will be a revival of the altcoin season
Bitcoin dominance represents BTC's weight in total crypto market capitalization. When BTC dominance follows an upward trend, BTC outperforms altcoins. On the contrary, when BTC dominance gives a bearish signal, we can speak of an altcoin season.
Technical analysis of BTC dominance highlights a recent bearish divergence in weekly data, and also points to the 60% dominance threshold as the borderline between altcoin season and no altcoin season.
Clearly, a bearish break of this 60% threshold (as in the previous cycle in 2021) would be the starting point for a possible altcoin season at the end of the current cycle. As long as the 60% threshold remains a support, there will be NO ALTCOIN SEASON.
2) The technical configuration of the Altcoin Season Index indicator suggests that a favourable sequence for altcoins is about to be relaunched
The bearish divergence validated on the dominance of BTC gives grounds for optimism for the end of the cycle. The same is true of the technical analysis applied to the Altcoin Season Index indicator, which has broken out of its low zone at the top and is showing a Chartist bullish continuation formation. This indicator therefore suggests that the 60% threshold on BTC dominance could soon be broken on the downside. There should therefore be another favourable period for altcoins before the end of the cycle.
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