Altcoin Season Might Be Coming as TOTAL2 Market Cap Increases and Bitcoin Dominance Decreases

Over the last few months, altcoin prices have dropped 30% to 70%, leading analysts to write off the possibility of an altcoin season.

Altcoin prices have dropped significantly in recent months, leading many analysts to dismiss the possibility of an altcoin season. However, fresh analysis by BeInCrypto suggests that the narrative may be shifting.

Here's a closer look at the indicator and the potential catalysts that could spark an altcoin season.

What is Altcoin Season?

Altcoin season is a period in the crypto market cycle when non-Bitcoin (BTC) cryptocurrencies experience a sustained surge in value, outperforming the world's leading coin.

One indicator that can help identify this period is TOTAL2, which represents the total crypto market capitalization excluding BTC. When this market cap rises, it suggests a potential increase in altcoin prices.

On the other hand, a decrease in total altcoin market cap indicates that Bitcoin is dominating the market. At the time of writing, the total altcoin market cap stands at $940.37 billion, reflecting a 4.87% increase in the past 24 hours.

Interestingly, the total altcoin market cap had earlier dropped by 23.26% between June 6 and July 8. If this indicator continues to rise, it will suggest that altcoin season is approaching.

The last time such a scenario occurred was between February and March, when the value of TOTAL2 rose from $753.83 billion to $1.24 trillion within a month.

Now, following the recent shift, analysts on X are seemingly changing their stance in favor of altcoin dominance. One such analyst is Michaël van de Poppe, the founder of MN Trading.

“The Altcoin market capitalization has reached a crucial higher timeframe support level and finds support here. It’s still early in the week, but if this week continues this upward trend, then the signs will start to improve.”

Bitcoin Dominance Steps Back, May Open Doors for Altcoins

Apart from opinions, another factor that can indicate whether altcoins are set to shine is the dominance of Bitcoin. For the cycle to be validated, BTC.D needs to decrease.

Using the weekly chart, we observe that BTC.D fell from 62.69% in March 2021 to 40.89% in May of the same year. This occurred around the same time that many altcoins hit their all-time highs in the last bull market.

This week, BTC.D has shifted from 55.04% to 54.68%, indicating that some altcoins have started to outpace BTC. For this to mirror the performance shown in 2021, at least 75% of the top 50 altcoins need to perform better than Bitcoin.

According to data from Blockchaincenter, only a handful of cryptocurrencies, including meme coins, have done so. Some of them are Toncoin (TON), Pepe (PEPE), Kaspa (KAS), and Bonk (BONK).

As a result, the Altcoin Season Index over the last 90 days remains at 29. However, this marks an improvement from a few days ago, when the reading was 25.

If the index continues to hit higher values, altcoins will get closer to retesting their all-time highs, putting BTC in the back seat in the process.

Ethereum, Solana’s Role Crucial

It is also worth noting that Ethereum (ETH) has always acted as a catalyst for fostering altcoin dominance.

In recent months, ETH has underperformed compared to BTC. However, the pending approval of spot Ethereum ETFs could spark a notable increase in ETH's value.

If this occurs, other altcoins may join the potential rally. In the case of Capo of Crypto, this update on ETH ETFs, along with VanEck and 21Shares filing for Solana ETFs, is why the analyst is bullish on altcoins.

“Selling pressure from the German Government is being absorbed. All spot Ethereum ETF applicants have filed updated S-1s.

VanEck & 21Shares have officially filed 19b-4s for spot Solana ETFs.

I’m bullish for the next few weeks, especially on altcoins.”

Based on the above analysis and market sentiment, altcoins seem poised for a major pump. However, traders should keep an eye out.

If selling pressure hits the market again, the hike could be invalidated. Also, if Ethereum doesn't see good inflows into the ETFs, the cryptocurrencies may

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