The total market value of cryptocurrencies has risen to $1.3 trillion. Is the spring of altcoins coming?

On Tuesday afternoon Eastern Time, Bitcoin briefly pulled back nearly 3% to $35,500. In the altcoin market, Solana led the rise, with Solana (SOL), Toncoin (TON) and Crypto.com Ecosystem Token (CRO) rising 5% to 10% over the same period. As the entire crypto market rebounded, the total market value of cryptocurrencies rebounded to $1.3 trillion, the highest level since May 2022.

Tradingview data shows that Bitcoin's market capitalization dominance has fallen from 54.3% at the end of October to 52.5%, indicating a growing interest in altcoins and sparking heated discussions about the possible arrival of an "altcoin season."

Mainstream altcoins performed strongly

Some major altcoins saw impressive gains. For example, Ripple ’s XRP surged nearly 10% in a single day to become the fourth-largest cryptocurrency by market cap, surpassing Binance ’s BNB, after Ripple announced it had received key licenses to operate and provide services in Georgia and Dubai.

Other well-known altcoins such as Cardano ’s ADA, Avalanche ’s AVAX, Dogecoin (DOGE), Chainlink ’s token ( LINK ), and UniSwap ’s token (UNI) also saw positive trends, with daily gains reaching 5% to 6%.

NFT marketplace Blur ’s BLUR token also rose 32% in just one day and doubled in the past month. The platform previously announced plans to airdrop 300 million tokens on November 20.

According to Blockchaincenter, 57% of the top 50 cryptocurrencies have outperformed Bitcoin in the past 30 days and 33% have outperformed Bitcoin in the past 90 days, which is below the 75% threshold for altcoin season but usually means the beginning of this stage.

Investment advisory firm ByteTree also believes that the "altcoin season" may be coming. They adjusted their model portfolio, reduced the weight of Bitcoin, and added altcoins such as NEAR token (NEAR), Stacks (STX), LINK and XRP.

Global investment management company VanEck said in a recent research report that by 2024, high-quality altcoins will "stand out." VanEck gave a prediction for Solana's price. The report simulated a scenario where the SOL price would reach $3,211 by 2030 in a bull market, an 80-fold increase from the current price.

Macro-favorable factors

Investors' shift to risky assets is inseparable from changes in the macro environment. The Federal Reserve has paused its interest rate hikes, and the price of safe-haven gold has fallen to its lowest level in three weeks. West Texas Intermediate (WTI) crude oil has plummeted 4% to its lowest level since July. Investors have turned to U.S. Treasuries for shelter, causing the 10-year Treasury yield to fall to 4.55%, the lowest level in six weeks. The S&P 500 has reached 4,383 points, the highest level in nearly seven weeks, exceeding expectations during the global economic slowdown.

“Mini Altcoin Season” ?

A report from K33 Research states that as Bitcoin’s price continues to compress between $34,000 and $36,000, capital shifting toward altcoins is creating a “mini altcoin season.”

This is reflected in the typical behavior of the cryptocurrency market, where traders take profits after BTC rises sharply and then put funds into smaller, riskier tokens. At the same time, K33 pointed out that the inflow of Bitcoin-related funds accelerated, providing support for BTC prices.

The Altcoin Cycle Signal indicator tracked by Glassnode shows that the Altcoin Cycle Signal was observed to follow the accumulation and consolidation of Bitcoin in February and August. It is currently close to 50.

The indicator is calculated using price data of the top 250 altcoins by market cap (excluding stablecoins) and depicts the market's inclination towards Bitcoin or altcoins. During "Bitcoin seasons", Bitcoin tends to outperform the altcoin basket, while the opposite is true during "altcoin seasons". The altcoin signal may mean an upcoming phase where altcoins start to outperform Bitcoin, provided the latter continues its accumulation trend.

Vetle Lunde, senior analyst at K33, said: "It is difficult, almost impossible not to remain optimistic. There are about nine weeks left before the results of the Bitcoin spot ETF. November is another month of positive accumulation of Bitcoin. Once the news comes out, funds in the market will rotate sectors and reallocate to altcoins."

However, one cryptocurrency analyst says the altcoin market could see a massive correction in the coming days due to its relationship with Bitcoin’s (BTC) market dominance.

Crypto Analyst warns his 51,000 followers on the X platform that the altcoin market could drop 30-60% “in the coming days.” He notes that when Bitcoin’s dominance becomes oversold, it usually signals a top in the altcoin market.

Furthermore, the Crypto Analyst highlighted that Bitcoin’s dominance has become oversold on the 1-hour, 4-hour, and daily timeframes. He claimed that in the past when Bitcoin’s dominance became “oversold,” the altcoin market entered a correction phase.