Kevin Svenson, a cryptocurrency analyst and trader, is predicting a new altcoin season ahead. He has identified a Bitcoin metric that could show us a significant altcoin market movement. The one you were probably expecting.
The metric in question is Bitcoin dominance. It measures Bitcoin's market capitalization relative to the entire cryptocurrency market.
Svenson notes, "Bitcoin dominance beginning to fall below its trend line, which could be a good sign for the altcoins."
He observes that the total altcoin market cap is finding support despite Bitcoin's recent drop. This suggests seller exhaustion in the altcoin market.
"[This] is a sign that sellers in the altcoin market are exhausted and we may start to see altcoin season kick in," Svenson explains.
The analyst points out an unusual market behavior. Typically, when Bitcoin falls, its dominance rises as investors seek refuge in the leading cryptocurrency.
However, the current situation is different. Bitcoin dominance is falling alongside Bitcoin's price.
Svenson interprets this as a positive sign for altcoins. "That is a sign that altcoins are gaining more confidence, more speculators, more money is flowing into the altcoins," he states.
The analyst also highlights a bullish divergence between altcoins and Bitcoin. He believes the altcoin market cap indicates seller exhaustion, in other words, the market is ready for a change, probably a rather substantial one.
"The altcoins are actually bullishly diverging against Bitcoin, you could say. What is clear looking at the altcoin market cap is that the sellers are exhausted," Svenson concludes.
Altcoin season refers to a period when alternative cryptocurrencies outperform Bitcoin. Many market gamblers like this season immensely, because in muddy waters of altcoins it is oh so much easier to earn quick and significant profits. Historical examples include the 2017 bull run and the DeFi boom of 2020. During these periods, smaller cryptocurrencies often see significant price increases relative to Bitcoin.
