Speculations are growing about the potential start of an altcoin season, as Bitcoin’s dominance faces challenges in breaking through the rising wedge. With Bitcoin’s resistance at $60,000 still intact, analysts believe that these conditions could pave the way for a new altcoin season. Analysis of the current situation suggests that Bitcoin’s dominance is struggling to rise above a certain level. If this dynamic continues, there could be a noticeable shift towards altcoins, opening the way for a new altcoin season in the space.
Bitcoin’s dominance reached 56.91%, but it failed to break through the upper line of the rising wedge on August 5. Since then, Bitcoin’s dominance has begun to decline. Bitcoin’s failure to break through the rising wedge is usually considered a bearish signal, which could mean that its market dominance has peaked or is in decline. As Bitcoin’s dominance weakens, it provides an opportunity for altcoins to increase their market share, as evidenced by the rise in the TOTAL2 index since August 5.
The TOTAL2 index measures the total market cap of the top 125 altcoins, and was worth $870 billion at the time of writing, up 2% since Bitcoin’s dominance began to decline. Analysts have noted that Bitcoin’s dominance is facing strong resistance from a downtrend, preventing it from breaking the wedge. “Bitcoin dominance failed to break the rising wedge, good news for altcoins,” wrote X.
Analysts have noted that Bitcoin’s dominance is nearing the “end of a diagonal pattern,” a technical analysis term that refers to a chart pattern that could signal a potential trend reversal. If Bitcoin’s dominance forms a final diagonal pattern, it signals a major shift in market sentiment. Such shifts typically mean that Bitcoin’s dominance is nearing its end, which could lead to significant altcoin activity and price increases.
Altcoin Season Begins
Few Coins Have Outperformed Bitcoin Despite analysts’ positions, it is important to note that altcoin season begins when at least 75% of the top 50 altcoins have outperformed Bitcoin in the past 90 days. Currently, only 14 altcoins, or 28%, have achieved this. Additionally, the TOTAL2 index is trading within a horizontal channel on the daily chart. This channel forms when there is a relative balance between buying and selling pressure, preventing the price from moving strongly in either direction. The altcoin season is set to fully begin when the TOTAL2 index manages to break the upper line of the channel, forming resistance. This breakout would confirm stronger momentum, signaling a shift away from Bitcoin dominance and opening the way for growth across altcoins.
The report noted that US-listed Bitcoin miners, which benefit from access to the deepest capital markets in the world, have a natural advantage over their unlisted, non-US counterparts.
The note added: “This validates our long-standing bias toward US-listed Bitcoin miners as market-supporting firms.” Furthermore, Bernstein analysts addressed the upcoming US elections, noting that current trends show a close race between Trump and Harris. As a result of the uncertainty surrounding the election, Bitcoin and crypto markets remain rangebound. Bernstein reiterated his view that a Republican victory, particularly Trump, would likely be seen as positive for the cryptocurrency market.
Is Bitcoin regulated? Bitcoin is currently unregulated by governments and central banks. A major concern about the future of Bitcoin is how the regulatory landscape will change over the next few years, and what impact that will have on investment value.
Bitcoin trading in all countries
Regulators in the United States have taken the lead in regulating Bitcoin and Bitcoin exchanges, though the issue remains controversial. For example, the US Treasury classifies Bitcoin as a virtual currency, the Commodity Futures Trading Commission classifies Bitcoin as a commodity, and the Internal Revenue Service has gone so far as to consider owning Bitcoin a taxable business.
Is Bitcoin trading allowed in all countries? It is not allowed in all countries. There are four countries that do not allow Bitcoin trading: Kyrgyzstan, Bolivia, Ecuador, and Bangladesh. There are also steps being taken in other countries — such as China, where Bitcoin exchanges and the country’s cryptocurrency have been banned — to limit interest in the virtual currency and limit its use.
Is Bitcoin trading risky? Trading in any market involves risks, but Bitcoin trading has pitfalls to consider:
- Volatility: Sudden and sharp movements in Bitcoin’s price can result in hundreds, if not thousands, of dollars lost in the blink of an eye
- Popularity: While Bitcoin’s popularity and use have surged in recent times, most businesses and consumers still avoid using the currency seriously
- Uncertainty about transactions: There’s no perfect way to prevent human error or technical glitches — and no systems that can compensate you if you lose
- The currency’s uncertain future: Virtual currencies are set to become the focus of governments and central banks over the next few years, and new regulations could undermine their advantages over fiat currencies
How many Bitcoins have been lost? There’s no way to know how many have been lost, but it’s estimated that of the 16 million or so Bitcoins in circulation to date, about 25% have been lost. This is because there is no way to recover Bitcoin lost due to negligence, death, hardware issues, or other reasons for the currency to disappear.
