Altcoin Season Might Be Coming as Indicator Flashes a Potential 'Relative Momentum Bottom' – Market Updates Bitcoin News

The altcoin market had been trending down over the past two weeks, but a key indicator reveals that the recent drawdown could indicate a “relative momentum bottom,” which, if history repeats, could soon see a “concerted take-off,” according to crypto analysts.

The altcoin market has been on a downward trend for the past two weeks, but a key indicator suggests that the recent sell-off could indicate a “relative momentum bottom,” which, if history repeats, could lead to a “concerted take-off” soon, according to crypto analysts.

The crypto Top 200 Equal Weight Index is still trending down, but the Altseason indicator shows that the recent washout when it hit 10% was probably a relative momentum bottom. This is according to Jamie Coutts, Chief Crypto Analyst at Real Vision.

The crypto Top 200 Equal Weight Index is an equally weighted index that aims to track the performance of the top 200 cryptocurrencies by market capitalization, excluding Bitcoin.

Coutts shared the chart below, which shows that the index has been trending downward, with the Altseason Indicator reaching a low of 10%. This means that “only 10% of the top 200 were outperforming BTC on a 90-day look back,” as explained by the analyst.

Throughout history, this has marked a bottom for the market, preceding a sustained rally in altcoins.

Coutts also considered another indicator across the broader crypto market — the daily active user (DAU) count — to support his prediction about the direction of the altcoin market.

DAU is a metric that reflects the number of unique public addresses transacting on a blockchain each day.

Coutts pointed out that the DAU count across all blockchains is up 97% year-to-date, which suggests that “growth continues unabated.”

More users means more user fees which translates to “higher asset prices,” he stated.

“I think some Altcoins out there are ready for round 2,” said Moustache, a popular crypto analyst, in a July 15 post, adding that the highly anticipated launch of spot Ethereum ETFs could provide the required hindwings.

In an earlier post, Moustache shared the following chart showing that the altcoin market cap was repeating a similar setup as in 2020 before embarking on “their strongest wave in the bull run.”

It’s still Bitcoin season

The Bitcoin dominance chart — measuring BTC’s market share relative to the overall crypto market — is one of the indicators commonly used to indicate whether the altseason has begun. It can provide traders with the overall investor sentiment and risk appetite in the market.

This indicator has been on an upward trend since the beginning of 2024, reaching a three-year high of 56.5% on April 13. At the time of writing, BTC dominance is at 54%, indicating that it is still Bitcoin season.

This means altcoins are still underperforming Bitcoin.

According to data from Blockchain Center, only 37% of the top 50 altcoins have outperformed BTC during the last three-month period. Although this is a positive sign, it is still not enough to declare an altcoin season. For an altseason to be declared, this percentage has to move above 75%.

This means that although signs of an altcoin season are starting to merge, it might be too early to make the call.

This article does not contain investment advice or recommendations. Every investment and trading move carries risks, and readers should conduct their own research when making a decision.

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