BTC dominance sees significant drop in 24 hours as altcoin surge approaches
Bitcoin (
BTC
) has experienced a significant 2% decline in dominance over the last 24 hours, sparking renewed interest and optimism among altcoin investors. This dramatic shift happened after a sharp sell-off earlier this week, raising questions about the onset of a new altcoin season.
Over $122 million in leveraged long
Bitcoin
positions were liquidated as BTC’s price dropped below $61,000, causing the risk of potentially falling below the critical $60,000 threshold.
The BTC Liquidation
Heatmap
, shared by
Credible Crypto
on
X
(formerly Twitter), highlights the largest amount of long liquidations in a single day since April. Negative funding rates imply traders are paying to hold short positions, indicating
bearish
sentiment.
A high open interest was observed, but many long positions have already been liquidated, reducing future selling pressure. This massive liquidation and price decline directly impacted the drop in BTC dominance, suggesting a reallocation of capital into altcoins.
Prominent analyst
Dami Defi
shared insights indicating a sharp decline in BTC dominance, suggesting that altcoins are gaining market share. Historically, a drop in BTC dominance leads to a surge in altcoin prices. The “Total 3 Index,” which measures the total market capitalization of all
cryptocurrencies
, excluding Bitcoin and Ethereum (
ETH
), remains stable at crucial
support
levels, supporting the argument that the altcoin market is poised for a resurgence.
In the wake of the recent Bitcoin price correction, which saw BTC dip below $59,000 before rebounding to $61,500, altcoins have shown remarkable resilience. Over the weekend, altcoins have shown significant activity despite Bitcoin’s disappointing performance. While BTC and Ethereum traded in the red, altcoins like Solana (
SOL
), Toncoin (TON), Dogecoin (
DOGE
), and Cardano (
ADA
) have posted impressive gains, erasing their losses from the previous week.
Prominent crypto analyst
Michael van de Poppe
observed
a familiar pattern where altcoins typically follow Bitcoin’s downward trend but then bounce back once BTC bottoms out. His analysis shows that Bitcoin pairs often exhibit signs of bottoming before USDT pairs, suggesting that current movements in altcoin prices
against Bitcoin may indicate an imminent reversal.
The ongoing developments related to the Mt. Gox Bitcoin
repayments
have also added to market volatility. Anticipation of these repayments has contributed to fluctuations in BTC prices, indirectly affecting altcoin performance.
The
Altcoin Season Index
, a metric used to gauge the relative performance of altcoins against Bitcoin, currently sits at a low of 22 out of 100. This reading indicates that we are still in a Bitcoin Season, but the market conditions are showing early signs of a potential shift.
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.