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Is altcoin season here again after Bitcoin Dominance falls by 2%?
The cryptocurrency market has been witnessing some remarkable price actions over the past couple of weeks. One of the most striking developments is the recent drop in Bitcoin’s dominance index, which has fallen by a significant 2%. This drop has led to a lot of speculation about whether we are finally seeing the start of altcoin season.
In the context of this market phenomenon, it is essential for investors to understand what exactly is happening. Altcoin season typically refers to a period when alternative cryptocurrencies, other than Bitcoin, experience an unprecedented surge in their prices. This has been observed historically whenever Bitcoin’s dominance index falls by more than 2%. However, one must note that such events are not always correlated with each other.
It seems like the altcoin market has had quite the impressive run as of late. We have seen a notable increase in the market cap of these smaller cryptocurrencies since June 27th. As of this writing, the total value locked into decentralized finance (DeFi) protocols has surpassed $1 trillion. This growth is not isolated to one particular blockchain or sector and could be an early indication that we might be entering another phase.
One thing worth noting is that the data suggests it may not be a straightforward correlation between Bitcoin’s dominance index falling by 2% and the start of altcoin season. The last time this happened, in November 2024, Bitcoin went on to reach new heights while the altcoins lagged behind. This casts some doubt over whether we are truly seeing the emergence of an altcoin season at present.
On a more positive note, it appears that Ethereum is charging towards $3,000 and shows no signs of slowing down. If this momentum continues, there’s a high probability that altcoin investors could start to get in on the action as well. The rally seen in this cryptocurrency might just be enough to spark a broader market trend.
Despite all these mixed signals, it’s clear that the crypto market is full of possibilities right now. One thing is certain – Bitcoin will need to enter a consolidation phase soon for the altcoin season to have any chance of taking off.
Source: ambcrypto.com
