The bitcoin price has been pushed back above $ 55,000 and is now falling again. Meanwhile, altcoins like Ethereum continue to grow despite the market capitalization of the leading cryptocurrency.
The recent divergence between the best dog and the rest of the altcoins has led to Bitcoin dominance at levels not seen since 2017 and 2018. Could this be the official start of the altcoin season before the market cycle starts again?
BTC dominance returns to levels not seen since the last crypto bull market
It has been over 1000 days since BTC’s dominance was last below the 50% level, which indicates that altcoins have taken over the cryptocurrency market.
For the last 1000 days and then a few days, Bitcoin has completely dominated, peaking at 73% by the end of 2020.
Related reading | Ethereum Closes Nearly $ 2,800 As ETH 2.0 Deposit Contract Reaches New ATH
BTC.D, the metric weighing the highest cryptocurrency market cap relative to the rest of the space, is now below 50% again and may be poised to set new lows if altcoin season is indeed on its way.
Altcoins are grabbing a lot more dominance this time around because there have been several times more coins since then, and each individual market cap is skyrocketing.
A weekly close below that box starts altcoin season | Source: CRYPTOCAP-BTC.D on TradingView.com
What Altcoin Season Means for Bitcoin, Ethereum, Litecoin and Other Major Coins
If altcoin season is indeed here, there are a few things crypto investors can expect based on past cycles. The start of the altcoin season does not always mean that the bitcoin race is over.
During the 2017 bull season, there were two different altcoin seasons and only one completed the historical cycle of the cryptocurrency market. Altcoins have far outstripped Bitcoin, and this scenario could be triggered now.
Related reading | Dogecoin’s rise: the good, the bad, and the ugly
But Bitcoin is still as optimistic as ever, just because altcoin season has arrived doesn’t mean that the bull run for BTC is over. Instead, altcoin capital can return to BTC, pushing the underlying crypto asset even higher.
Once a coin reaches the top of the Grand Finale cycle, another altcoin season can serve as exit liquidity before the cycle ends and it all starts to repeat itself.
Larger and more reputable altcoins such as Ethereum and Litecoin will operate first, then money from large companies will flow into midcap and eventually the risk will move to smallcap for lunar-type profits.
The most important thing is to exit when it seems like things are coming to an end, as altcoins tend to crash down to 99% when they finally fizzle out and momentum decreases instead.
Featured image from Pixabay, Charts from TradingView.com