- Bitcoin’s dominance in the cryptocurrency market has reached a three-year high, signaling its strong market position.
- Altcoin season typically follows Bitcoin’s decline, but significant growth in Bitcoin and Ethereum is expected first.
- Experts predict that the foundation for altcoin growth may be set by the end of 2024, following potential positive momentum in Bitcoin and Ethereum.
The Bitcoin Dominance Index, which tracks Bitcoin’s market share compared to the rest of the cryptocurrency market, has reached a three-year high of 55.9%. The last time it was this high was in April 2021, according to data from Coinmarketcap.
Bitcoin’s dominance has been steadily increasing since the end of 2022 when it hit a local low of 38%. The lowest point in the past six years was 32.5%, recorded at the start of 2018.
This index, often referred to as Bitcoin Market Share or simply Bitcoin Dominance, represents the ratio of Bitcoin’s market capitalization to that of the entire cryptocurrency market. Several factors influence this metric, including fluctuations in Bitcoin’s price, the valuation of altcoins, the rise of stablecoins, overall market conditions, and the introduction of new cryptocurrencies.
When Is Alt Season?
As Bitcoin’s dominance begins to wane, traders, investors, and analysts often view this as the onset of altcoin season. This has led many in the market to wonder when non-Bitcoin cryptocurrencies will start to surge.
Alt season is a term used by cryptocurrency traders to describe a period when alternative cryptocurrencies experience significant, simultaneous growth. It is generally believed to unfold in four phases: first, Bitcoin rises; then Ethereum gains momentum; next, large-cap cryptocurrencies start growing; and finally, there is a massive surge in the rest of the crypto market, including low-liquidity assets that often lack fundamental value, driven by a wave of enthusiasm from retail traders.
If 75% or more of cryptocurrencies achieve a 90-day return percentage higher than Bitcoin, it is also considered an altcoin season. This forms the basis for calculating the Altcoin Season Index, which, as of August 13, stands at 24%, according to data from Blockchaincenter.
Arthur Hayes, the former head of the Bitmex crypto exchange, believes that altseason will only begin once Bitcoin and Ethereum surpass the $70,000 and $4,000 marks, respectively. He pointed out that the growth of these two major assets is a prerequisite for the broader market conditions necessary for the rise of other cryptocurrencies.
Hayes expects positive price momentum for Bitcoin and Ethereum to start in September, and by the end of 2024, he anticipates that the foundation for altcoin growth could be established.
