Cryptocurrency Market Surges, Altcoins Gain Ground
The cryptocurrency market is experiencing a significant upswing, with the total market capitalization appreciating by over 15% in July. This surge culminated in a new all-time high of $3.80 trillion earlier this week. Bitcoin’s rally to a record $123,218 has been a key catalyst for this broader market recovery, despite ongoing regulatory pressures and political gridlock in the United States.
Ethereum’s Rising Dominance
Ethereum (ETH) is increasingly challenging Bitcoin’s dominance, gradually eroding its market share. This shift indicates a growing risk appetite among investors, as they diversify into alternative cryptocurrencies. Veteran analyst Peter Brandt has identified a cup-and-handle pattern in the total cryptocurrency market capitalization, excluding Bitcoin. This pattern suggests that the next altcoin season could be on the horizon.
Bitcoin’s Dominance Under Pressure
Bitcoin’s dominance, measured by its market capitalization relative to the total cryptocurrency market, is facing pressure. Historically, altcoin seasons in 2018 and 2022 saw capital rotate from Bitcoin to altcoins, leading to a sharp decline in Bitcoin’s dominance (BTC.D).
Currently, BTC.D stands at 62.89%, down from 66% on June 27th. A weekly close below the 63.15% support level, marked by the May 11th close, could extend this downward trend towards the 50-week exponential moving average (EMA) at 60.90%.
Conversely, Ethereum’s dominance (ETH.D) has risen to 11.02%, up from 9.04% on June 27th, signaling increasing strength relative to Bitcoin. The ETH/BTC chart further supports this, showing Ether’s 16% appreciation against Bitcoin this week.
Altcoin Season on the Horizon?
The total market capitalization reached a new all-time high of $3.80 trillion on Monday, fueled by improving market sentiment. The CoinMarketCap Fear & Greed Index, a sentiment indicator, currently reads 70, indicating a risk-on environment.
The CoinMarketCap Altcoin Season Index currently sits at 38, up from 23 on July 1st. This increase suggests a shift of capital from Bitcoin to altcoins. A value above 75 typically signifies an altcoin season.
Capital rotation has propelled the total cryptocurrency market capitalization, excluding Bitcoin (TOTAL 2), by over 8% this week, reaching $1.41 trillion. Peter Brandt has identified a cup-and-handle pattern on the weekly TOTAL 2 chart.
The analyst highlights the neckline at $1.70 trillion, close to the all-time high of $1.71 trillion reached during the 2021 altcoin season. A weekly close above this level could signal the start of a new altcoin season cycle.
In such a scenario, the market capitalization of altcoins could surpass the $2 trillion mark, pushing the total market valuation beyond $4 trillion.
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