The total market capitalization of cryptocurrencies has risen to $1.3 trillion. Is it the spring of altcoins?

Author: Mary Liu, BitpushNews

On Tuesday afternoon Eastern Time, Bitcoin briefly surged nearly 3% to $35,500. In the altcoin market, Solana led the rise, with Solana (SOL), Toncoin (TON), and Crypto.com ecosystem token (CRO) increasing by 5% to 10% simultaneously. As the entire crypto market rebounded, the total market capitalization of cryptocurrencies bounced back to $1.3 trillion, the highest level since May 2022.

Data from Tradingview shows that Bitcoin's market dominance has slipped from 54.3% at the end of October to 52.5%, indicating a growing interest in altcoins and sparking heated discussions about the potential arrival of an "altcoin season."

Mainstream Altcoins Perform Strongly

Some mainstream altcoins have seen astonishing gains. For example, Ripple's XRP surged nearly 10% in a single day, becoming the fourth-largest cryptocurrency by market capitalization, surpassing Binance's BNB, after Ripple announced it had obtained key licenses to operate and provide services in Georgia and Dubai.

Other well-known altcoins, such as Cardano's ADA, Avalanche's AVAX, Dogecoin (DOGE), Chainlink's token (LINK), and UniSwap's token (UNI), also showed positive trends, with daily gains reaching 5% to 6%.

The NFT market's Blur token (BLUR) also rose 32% in just one day, doubling in value over the past month, after the platform announced plans to airdrop 300 million tokens on November 20.

According to data from Blockchaincenter, 57% of the top 50 cryptocurrencies outperformed Bitcoin in the past 30 days, and 33% outperformed Bitcoin in the past 90 days. Although this is below the 75% threshold typically seen at the start of an altcoin season, it generally indicates the beginning of this phase.

Investment advisory firm ByteTree also believes that an "altcoin season" may be approaching. They adjusted their model portfolio, reducing Bitcoin's weight and adding altcoins such as NEAR token (NEAR), Stacks (STX), LINK, and XRP.

Global investment management firm VanEck stated in a recent research report that by 2024, high-quality altcoins will "stand out." VanEck provided a price prediction for Solana, simulating a scenario where, in a bull market by 2030, the price of SOL could reach $3,211, an 80-fold increase from its current price.

Macro Positive Factors

The shift of investors towards risk assets is closely tied to changes in the macro environment. The Federal Reserve has paused interest rate hikes, safe-haven asset gold prices have fallen to their lowest level in three weeks, and West Texas Intermediate (WTI) crude oil has plummeted 4% to its lowest level since July. Investors are flocking to U.S. Treasuries for refuge, causing the 10-year Treasury yield to drop to 4.55%, the lowest level in six weeks. Meanwhile, the S&P 500 index has reached 4,383 points, the highest level in nearly seven weeks, exceeding expectations during a global economic slowdown.

"Mini Altcoin Season"?

A report from K33 Research noted that as Bitcoin's price continues to compress between $34,000 and $36,000, capital shifting to altcoins is creating a "mini altcoin season."

This is reflected in typical behavior in the cryptocurrency market, where traders take profits after a significant rise in BTC and then invest in smaller, higher-risk tokens. At the same time, K33 pointed out that Bitcoin-related funds are accelerating inflows, providing support for BTC prices.

The altcoin cycle signal indicator tracked by Glassnode shows that in February and August, altcoin cycle signals were observed following Bitcoin's accumulation consolidation. It is currently close to 50.

This indicator is calculated using price data from the top 250 altcoins by market capitalization (excluding stablecoins), depicting the market's inclination towards Bitcoin or altcoins. During "Bitcoin seasons," Bitcoin typically outperforms the altcoin basket, while the opposite is true during "altcoin seasons." The altcoin signal may indicate an upcoming phase where altcoins begin to outperform Bitcoin, provided the latter continues its accumulation trend.

K33 senior analyst Vetle Lunde stated, "It's hard, almost impossible, not to be optimistic. There are about nine weeks until the outcome of the Bitcoin spot ETF, and November is another month of positive accumulation for Bitcoin. Once the news lands, funds in the market will rotate sectors and be reallocated to altcoins."

However, a cryptocurrency analyst warned that due to the relationship with Bitcoin's (BTC) market dominance, the altcoin market may experience a significant correction in the coming days.

Crypto Analyst warned his 51,000 followers on the X platform that the altcoin market could drop 30-60% in the "coming days." He pointed out that when Bitcoin's dominance becomes oversold, it usually indicates that the altcoin market has peaked.

Additionally, Crypto Analyst emphasized that Bitcoin's dominance has become oversold across the 1-hour, 4-hour, and daily timeframes. He claimed that in the past, when Bitcoin's dominance was "oversold," the altcoin market entered a correction phase.