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Bitcoin (BTC) continues its historical price trajectory, trading in the low $90,000 range at the time of writing. However, one trading firm suggests that Bitcoin (BTC.D) dominance falling below a crucial level could signal the start of the long-awaited altcoin season.
Interest rate cuts and the Trump administration will push cryptocurrencies
In a recent Telegram broadcast, Singapore-based trading firm QCP Capital subscriber Analysis of its crypto market. The company highlighted Solana’s (SOL) recent performance, noting that it outperformed Bitcoin and Ethereum (ETH) over the weekend, rising more than 17% from Friday’s lows.
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Despite this, QCP Capital acknowledged that many investors are still hesitant to embrace the prospect of an imminent replacement season, given Bitcoin’s steady rise towards the psychologically important $100,000 mark. React Capital analysis supports This sentiment indicates that BTC is just starting its parabolic phase.
However, QCP Capital predicts that a combination of Donald Trump’s victory in the US presidential election and interest rate cuts by the Federal Reserve (Fed) could set the stage for a full altcoin season in the coming months.
Trading firm sets key Bitcoin dominance threshold for Altseason
According to QCP Capital, altcoins historically outperform major cryptocurrencies once the latter consolidate after significant rallies. The company explained:
Historically, we have seen altcoins outperform when majors consolidate after a big rally as profits shift to smaller cap coins. BTC dominance is around 60% now and will likely be around below 58% to signal the start of altcoin season.
Currently, BTC.D is at 60.10%. A look at the weekly chart shows that Bitcoin’s dominance has been on a consistent uptrend since November 2022, when it was hovering at 39.92%. During this two-year period, most altcoins significantly underperformed Bitcoin.
However, altcoins have recently shown signs of recovery, coinciding with the growing prospect of a pro-crypto Trump administration. Digital assets such as SOL, Cardano (ADA), and XRP have significantly outperformed BTC in the past few weeks.
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QCP Capital’s analysis is consistent with that of cryptocurrency analyst @MikybullCrypto, who expects BTC.D to decline starting in December. According to the analyst, the alternative season could start at the end of November and last until March 2025.
Some analysts believe that Bitcoin may continue to rise before it shows signs of weakness. For example, Fundstrat’s head of research, Tom Lee, recently male BTC is on track to reach $100,000 before the end of the year.
However, the market cap of the altcoin recently rose It crossed a key resistance level, indicating that altcoin season may be closer than expected. At press time, Bitcoin is trading at $91,760, and has been trading flat for the past 24 hours.
Featured image from Unsplash, charts from X.com and Tradingview.com