The talk around an altcoin season has been on the lips of the members of the crypto community since the start of the year. However, most altcoins have been unable to sustain any meaningful bullish momentum over the past few months.
Interestingly, a market intelligence firm has come forward with the projection that these digital assets are set to outpace Bitcoin, the world’s largest cryptocurrency by market capitalization, in the coming months.
Is The Altseason Around The Corner?
In a June 14 post on the social media platform X, on-chain analytics platform Alphractal revealed that “something big” is about to happen with altcoins. This prediction is based on the Altcoin Dominance metric and its movement around a historically relevant support level.
Alphractal’s analysis examined two Altcoin Dominance metrics: one that excluded all stablecoins and another that excluded Ethereum and all stablecoins. Historically, the former has found strong support around 25%, a level that has often served as a springboard to major altcoin rallies.
Source: @Alphractal on X
As shown in the chart above, the Dominance metric fell to the 25% level before bouncing back to around 35% in 2020. Similarly, the metric declined to 24% before rallying to above 50% in 2021 — around the time of the last major altseason.
As of now, the Dominance metric is around 27.91% and could be facing a potential reversal as it approaches this crucial support. Hence, there is an increased likelihood for altcoins to witness major market moves over the next few months.
As for the Dominance metric — excluding ETH and stablecoins, the critical support stands around 18%. Breaching this support can be historically correlated to significant price movements that allowed altcoins to gain market share ahead of Bitcoin.
Source: @Alphractal on X
Ultimately, the movement of these Dominance metrics signals that the market could be on the verge of a wave of volatility in the coming days. Alphractal mentioned that many altcoins are likely going to outperform Bitcoin in the coming months, regardless of whether the premier cryptocurrency rises or falls.
The on-chain analytics firm concluded:
These levels don’t guarantee the start of an Altcoin Season, but they’ve proven to be meaningful signals with a strong historical probability of leading to major market moves.
Ethereum, The King Of Altcoins
Ethereum still ranks as the second-largest cryptocurrency in the digital asset sector, with a market capitalization of over $302.2 billion. As of this writing, the ETH token is valued at around $2,504, reflecting a 1.6% price decline in the past 24 hours.
The price of ETH on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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