Investors in the cryptocurrency market are constantly looking for the next “alt season”. But according to crypto analysts Austin Arnold and Ben Cowen, it may not be the right time to invest in altcoins yet. In a recent video analysis, the duo warned investors not to buy altcoins at this time. Here are the details…
The importance of Bitcoin dominance in altcoin trading
Bitcoin dominance is a measure of the total market cap of Bitcoin relative to the total market cap of all cryptocurrencies. As Arnold points out, dominance is currently already at 52.5 percent when you exclude stablecoins. This means that altcoins are constantly devalued in Bitcoin pairs throughout this market cycle. Armstrong said that for the altcoin calculation to truly come to an end, the alt season index indicator would have to drop to about five – a level that has yet to be seen.
As they both pointed out, Bitcoin’s dominance will not rise forever. They estimate it will likely reach around 65 percent this time around, which is not much higher than its current level. cryptocoin.com As we also pointed out, Bitcoin dominance occurs when Bitcoin rises, not when it falls. According to analysts, the meaning of dominance is that it shows the flow of the cycle. When dominance reaches a high level, too much money can flow into the altcoin market and investors can splurge.
What does the altcoin season index show?
The alt season index indicator tells traders whether the market is in Bitcoin season or alt season relative to the previous 90 days. Austin points to Bitcoin season where the metric drops to about five every one and a half to two and a half years. So he explains that the metric should come to this deep value. In the last cycle, the altcoin season index indicator double-bottomed where it entered the Bitcoin season a bit, but those levels only lasted a few months before everything leveled off again. Austin explained that this move is similar to 2019, when a double bottom was observed in the altcoin season index indicator.
Investors need to be careful when it comes to investing in altcoins at this point in the market cycle. According to Arnold and Cowen, once altcoins have actually reclaimed the market cap percentage that should be Bitcoin, it may not be worth the risk again until that altcoin calculation is finalized. They advise investors to stop buying altcoins until Bitcoin dominance reaches a much higher level.
After the recent rally, Bitcoin price continues to trade sideways in a small region, suggesting that bulls and bears are less involved in the market at the moment. Meanwhile, altcoins are also following stellar crypto and show no significant price action. So, it may seem like a good time to save as the market seems to have had a volatile weekend, but it should still be noted that the markets have yet to confirm any trends.
What is the latest situation in Bitcoin?
Meanwhile, the XRP price, which has shown great strength in the recent past, topped the list of losers among the top 100 cryptocurrencies by market cap. Other altcoins in the top 10, such as Cardano (ADA), Dogecoin (DOGE), Polygon (MATIC), and Solana (SOL), are posting a small average gain of 3 percent. Despite the massive rise, BTC price has yet to break the main resistance and thus the upcoming trend remains uncertain.
BTC price is currently testing one of the critical resistances at $28,411 and a daily close above these levels could confirm a subtle rise, according to analyst Sahana Vibhute. However, it is not yet certain whether the bull market will continue after breaking these levels. Meanwhile, the altcoin market cap has been stuck in a very small region around $600 billion for quite some time and is constantly trying to break above the levels. Unfortunately, it always resulted in a rejection that dragged the levels to $560 billion.
Currently, its market cap has stayed at $600 billion for several days, indicating a potential breakout soon. Also, a notable bull rally could occur that could intensify later, when the price of Bitcoin (BTC) closes daily trading above the main resistance and the altcoin market cap rises above $600 billion.
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