After concluding at a two-year peak of 58.41% on September 19, Bitcoin’s dominance (BTC.D) has begun a downward trajectory, reporting a decline of 2%. Conversely, the total market capitalization of all altcoins (TOTAL2) has experienced an uptick, suggesting a shift in investor sentiment.
Nevertheless, there’s a caveat. TOTAL2 has been in a consistent decline, signaling sluggish market activity as traders remain on the sidelines, awaiting a catalyst to incite the anticipated bull run in the final quarter of the year.
Altcoin Season Might Be Looming, Yet Lacks Strong Momentum
At the moment, TOTAL2 is positioned at $927 billion, having risen 5% since the fall of BTC.D. This indicates a growing interest in altcoins over Bitcoin in the last ten days.
However, the momentum indicators for TOTAL2 suggest that the buying pressure has diminished in recent days. This is attributed to a slowdown in overall market activity as traders await a trigger to kickstart the much-anticipated “Uptober.”
For example, the histogram bars in TOTAL2’s Moving Average Convergence/Divergence (MACD) indicator have noticeably shrunk in the past few days.
Read More: 11 Cryptos to Consider for Your Portfolio Ahead of Altcoin Season
Although the MACD line (blue) remains above the signal line (orange), suggesting that buying activity is outpacing selling pressure in the altcoin market, the diminishing size of the histogram bars typically indicates weakening momentum within bullish trends.
Additionally, the declining bars of TOTAL2’s Elder-Ray Index, which gauges the strength of bulls and bears in the market, reinforce this stance. While this indicator has displayed green bars, signifying bullish control, the contracting size of these bars denotes a waning buying pressure and that bulls are slowly relinquishing their hold on the market.
Altseason Might Not Arrive Soon
Following a 20-day period beneath TOTAL2, the dots of its Parabolic Stop and Reverse (SAR) indicator switched to the top during Monday’s trading session, indicating a change in market sentiment. This reversal usually signifies that the current uptrend is losing steam, and a downtrend may commence.
Furthermore, data from Blockchain Center indicates that the altcoin season begins when at least 75% of the top 50 altcoins outperform Bitcoin over a three-month span. Presently, only 49 of these assets have exceeded Bitcoin’s performance in the last 90 days, suggesting that the altcoin season has yet to begin.
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