BTC’s dominance drops sharply in 24 hours

Bitcoin (Bitcoin) has seen a significant decline of 2% in the last 24 hours, sparking renewed interest and optimism among altcoin investors. This dramatic shift comes on the heels of a sharp sell-off earlier this week, raising questions about the start of a new altcoin season.

Over $122 million in leveraged long positions Bitcoin positions were liquidated when BTC price fell below $61,000, increasing the risk of potentially falling below the critical $60,000 threshold.

The liquidation of BTC Heat mapshared by Credible Crypto on X (formerly Twitter), highlights the largest number of long liquidations in a single day since April. Negative funding rates imply that traders are paying to hold short positions, indicating that bearish feeling.

Despite the high opening interest, many long positions have already been liquidated, potentially reducing future selling pressure. This massive liquidation and price decline directly contributed to BTC’s declining dominance, suggesting a reallocation of capital into altcoins.

Liquidity shift to altcoins

Renowned analyst Dami Defi has shared insights that indicate a sharp decline in BTC dominance, suggesting that altcoins are gaining market share.

Historically, a decline in BTC dominance often leads to a surge in altcoin prices. The “Total 3 Index”, which measures the total market capitalization of everyone cryptocurrenciesexcluding Bitcoin and Ethereum (ET), remains stable at the crucial point support levels, supporting the thesis that the altcoin market is ripe for a resurgence.

Analysts have also noted that BTC’s declining dominance signals a flow of liquidity into altcoins, echoing similar patterns from past market cycles. The “Total 3 Index” maintaining local support further supports the idea of ​​a potential altcoin season.

In the wake of Bitcoin’s recent price correction, which saw BTC fall below $59,000 before rebounding to $61,500, altcoins have shown remarkable resilience. Over the weekend, altcoins showed significant activity despite Bitcoin’s disappointing performance.

While BTC and Ethereum were trading in the red, altcoins like Solana (SOL), Toncoin (TON), Dogecoin (DOGE) and Cardano (ADA) posted impressive gains, erasing the previous week’s losses.

Renowned crypto analyst Michael van de Poppe observed a familiar pattern where altcoins typically follow Bitcoin’s downtrend but then recover once BTC hits bottom.

His analysis shows that Bitcoin pairs often show signs of bottoming before USDT pairs, suggesting that current altcoin price movements against Bitcoin could indicate an imminent reversal. His analysis highlights Bitcoin’s recent strong rebound from lows, with altcoins performing even better from that level.

Current developments concern Mt. Gox Bitcoin refunds they also increased market volatility. The anticipation of these redemptions has contributed to BTC price fluctuations, indirectly impacting the performance of altcoins.

Indicators of an upcoming Altcoin season

With altcoins showing strength and market indicators pointing towards a potential trend reversal, investors are closely watching for signs of an impending altcoin season.

Seasonal Altcoin Index. Source: Blockchaincenter

THE Seasonal Altcoin Indexa metric used to evaluate the relative performance of altcoins versus Bitcoin, currently sits at a low of 22 out of 100. This reading indicates that we are still in Bitcoin season, but market conditions are showing early signs of a potential change .

While there are promising signs of an upcoming altseason, the cryptocurrency market remains inherently unpredictable. Investors should remain vigilant and stay informed about market trends and changes.

It is crucial to thoroughly investigate and analyze altcoin projects when building investment positions to maximize potential gains while effectively managing risks.

Disclaimer: The content of this site should not be considered investment advice. Investing is speculative. When you invest, your capital is at risk.

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