Bitcoin has risen more than 7% since the beginning of the year, leading the cryptocurrency market to a promising recovery. While this bullish momentum is fueling optimism, many investors are shifting their focus to altcoins, anticipating greater opportunities in the broader crypto space. Historically, Bitcoin rallies often lay the groundwork for altcoins to trail in, and current market conditions suggest this pattern may be repeated.
Senior analyst Jelle recently shared a compelling technical analysis for X, pointing to a potential shift in market dynamics. According to Jelle, the TOTAL3 – a market cap index that excludes Bitcoin and Ethereum – appears to be about to enter a price discovery phase, a phase in which assets test new highs due to increasing buying pressure. To add weight to this perspective, Bitcoin dominance, a measure of Bitcoin’s share of the overall cryptocurrency market, has just collapsed, indicating that Bitcoin’s market hold is weakening.
These indicators point to the beginning of the alt season, a period in which alternative cryptocurrencies outperform Bitcoin. With BTC stabilizing near crucial levels, conditions appear ripe for altcoins to attract investor attention. The coming weeks will be pivotal in determining whether this trend gains momentum, which could reshape the market landscape for 2025.
It’s time for an alternate season
Bitcoin has had a stellar 2024, reaching new heights and cementing its position as a market leader. Heading into 2025, Bitcoin continues to show its strength, but there may be a shift in market dynamics on the horizon. Historically, Bitcoin’s dominance often declines during periods when altcoins are gaining traction, and this year may be no exception.
Senior Analyst Geely I recently provided insights into these changing dynamics Through detailed technical analysis of TOTAL3 and BTC dominance. TOTAL3, an index that tracks the market cap of altcoins excluding BTC and Ethereum, appears poised to enter price discovery — a phase in which assets explore new highs driven by rising demand. At the same time, Bitcoin’s market dominance has seen a major collapse, suggesting that altcoins may soon take the lead in attracting investor interest.
Geely’s analysis highlights that as Bitcoin stabilizes near key levels, liquidity often flows into altcoins, leading to what is popularly known as altcoin season. During these periods, altcoins historically outperform Bitcoin, providing significant returns for investors seeking diversification.
The combination of Bitcoin’s strong foundation and the potential for outperformance of altcoins sets the stage for 2025 to be a great year for the broader cryptocurrency market. With TOTAL3 inches closer to price discovery and BTC’s dominance weakening, the opportunity for altcoins to shine is becoming increasingly clear.
Price Action: Key Levels to Watch
Bitcoin is currently trading at $97,900, with the price testing the crucial 4-hour 200 Moving Average (MA) at $98,139. This level has become a pivotal point for Bitcoin, as it determines whether the bulls can regain control and push the price above the $100,000 mark. Reclaiming this level and holding above it would indicate renewed upward momentum and pave the way for a strong breakout.
However, the market remains cautious, and if Bitcoin fails to hold the 4-hour 200 MA, a period of extended consolidation may follow. This sideways movement is likely to test the patience of traders and investors alike. The key support to watch is the 4-hour 200 Exponential Moving Average (EMA) at $95,881. Missing this level could indicate a deeper correction, raising concerns about a possible retest of low demand areas.
For now, Bitcoin’s ability to hold above the 4-hour 200 MA and push higher will determine its short-term course. A sustained move above $98,139 and a break above $100,000 will confirm bullish strength. Conversely, a break below the 4-hour moving average may delay the next phase of the rally, leaving the market in a state of uncertainty. The coming days will be crucial for BTC’s trend.
Featured image by Dall-E, chart from TradingView