Key Points
- Bitcoin’s dominance struggles at a key resistance level of 58%, raising hopes for a stronger altcoin season.
- The altcoin season index reached its highest level in six months, indicating a remarkable altcoin performance.
Bitcoin’s dominance in the market has encountered resistance at the 58% mark. This has sparked optimism for a more robust altcoin season, especially if Bitcoin’s market share continues to decline.
Historically, altcoins have shown significant growth when Bitcoin’s dominance decreases. Since 2023, the dominance of Bitcoin (BTC.D) has risen from 40% to a recent peak of 58%.
Bitcoin Dominance and Altcoin Season
However, this 58% level also serves as a resistance point. If this is not overcome, Bitcoin’s dominance could decrease further. Many market observers suggest that such a decline could speed up the altcoin rally.
One metric that measures the health of the altcoin sector is the ETH/BTC ratio. This ratio assesses the value of Ethereum relative to Bitcoin. As Ethereum is the largest altcoin, this ratio also reflects the overall performance of the altcoin sector.
Since the Federal Reserve’s pivot on September 18, Ethereum has outperformed Bitcoin. This suggests a better performance by altcoins during this period, during which Bitcoin’s dominance fell by 2.5%.
Altcoin Performance
Last week, memecoins, led by Shiba Inu, showed a significant recovery. On the monthly charts, the Sui network, Bittensor, and Popcat were the top performers in September, with double and triple-digit gains.
At the time of writing, the Altcoin Season Index reading was 49, the highest level since March. This highlights the impressive performance of altcoins last month. Despite strong investor interest in altcoins, the founder of CryptoQuant noted that a large-scale capital shift from Bitcoin to altcoins has not yet begun.
In other words, the altcoin season is gaining momentum and offers potential upside for those exposed to it. As such, dips in Bitcoin could be excellent opportunities to acquire more ‘cheap’ altcoins with significant potential.
