The altcoin market, along with Bitcoin, has been experiencing massive gains this week with a hope of revival to investors after their price bottoms in 2022. To be more specific, altcoins are performing with full potential as the dominance surged over 50% in the last few days.
However, Bitcoin’s dominance is still near the 40% mark, hinting that traders are bored of trading Bitcoin and have switched their investment plans to altcoins. Therefore, several analysts believe that an altcoin season may soon happen if BTC’s price makes a slight downward retracement.
Bitcoin’s Bullish Influence On Altcoin Season
The new year has shocked bears with an unexpected price pump in leading assets like Bitcoin, Ethereum, and several altcoin kings. The astronomical rise in the altcoin market has been remarkable for Solana, Lido DAO (LIDO), and Cardano, as they recovered over 30% in value in just two weeks.
The primary factor that pushed Bitcoin’s dominance is the positive CPI data, which created enough buying pressure in the altcoin market with the spice of Ethereum’s Shanghai upgrade’s hype and negative funding rate in the Alt-futures market.
A recent report from an on-chain data provider, Arcane Research, suggests that altcoin indexes are hovering in the range of 28% to 31%, and it may soon outperform Bitcoin in a bull run as it is giving challenging competition to Bitcoin index which is moving at 27%.
Moreover, the total market capitalization of altcoins has also exceeded its crucial resistance level of 50-EMA at $465 billion and aims to break its 100-EMA at $563 billion, signifying a bullish altcoin season by the end of this month.
The altcoin season index chart from Blockchain Center predicts an upcoming altcoin season. According to the chart, the index trades at 27, which means the crypto market is preparing for an escape velocity powering altcoin season as the trendline moves away from the Bitcoin season near the 25-level and aims to surge to the 75-level, bringing a favorable season for alt traders.
However, an analyst from CryptoQuant warned by saying, “Today, altcoin dominance is again above 50%. Obviously, it doesn’t have to be as heavy as these examples. But be aware: when altcoins continue to dominate, there is a potential risk for further downside.”
Meme Coins Continue To Trade In Green
Whenever the crypto market experiences a boom, it takes the gang of meme coins to new highs as they can be easily pushed to the North with no significant impact from the macro conditions of the market. As of writing, popular meme coins like Dogecoin and Shiba Inu have added over 4% and 16% to their values, respectively.
As seen before, altcoin traders usually get involved in meme coins after generating lucrative profits from the altcoin season. According to Arcane Research, the small-caps altcoin index (meme coin) usually surges after large-caps and mid-caps indexes decline. Hence, a significant uplift in the meme coin rally is forecasted after a cooldown in the altcoin season.
