Key Takeaways
What’s the current altcoin season status?
BTC dominance was flat below 60%, but more liquidity was needed for a massive breakout.
Is an altcoin surge likely in October?
Swissblock analyst projected a potential rally that could extend to late October.
Altcoin markets have been mixed this week. While Binance [BNB] led the sector and printed a new ATH above $1,350, others bled out.
But altcoin analysts at Swissblock noted that a broader rally, commonly known as altcoin season, was still on the cards.
The analysts said that Bitcoin [BTC] dominance has consolidated below 60% which could lift ETH/BTC and trigger the altcoin season.
“This is the moment for $ETH to make its claim. If BTC dominance stays calm, it opens the door for liquidity to flow outward. This is ETH’s moment to lead the next rotation.”
Source: Swissblock
Typically, a rally in ETH/BTC underscores ETH outperformance and often coincides with altcoin bidding. But the ETH/BTC cool-off since late August has stalled the altcoin season.
Assessing altcoin season breakout points
The liquidity also painted a similar picture. Between April and August, USDT dominance dropped from 6% to 4%, triggering massive rallies for altcoins like Hyperliquid [HYPE] in Q2 and early Q3.
A drop in USDT dominance implies increased liquidity has holders exchange their stablecoins for favorite altcoin gems. The reverse always calls for caution.
Source: USDT Dominance vs Altcoin market cap (excluding top 10 assets)
Since late August, USDT dominance has recovered slightly to over 4.5% before easing to 4.3%.
It meant investor caution as traders opted to park stablecoins instead of jumping on altcoins. By extension, it also implies rising selling pressure as traders dump their assets for stablecoins.
So, for a potential breakout for altcoin season, the USDT dominance should decline sharply again to 4% or below.
Additionally, the altcoin market’s surge above the trendline resistance could raise the odds for another surge.
However, a rising USDT dominance and a rejection of the OTHERS indicator (altcoin market cap excluding top 10 assets) at the resistance level could further delay the altcoin run.
Even so, Swissblock analyst Henrik Zeberg said that another phase of the altcoin surge could be triggered at any time and likely extent for the next four weeks, citing technical analysis.
The above window would coincide with the expected altcoin ETF approvals for Solana [SOL], Ripple [XRP], Cardano [ADA], and others.
But CryptoQuant analyst JA Maartunn warned that overall Open Interest in altcoin has hit about $70B and surpassed BTC’s $43B.
A similar set-up in late 2024 was followed by consolidation and a 30% dip in BTC, capping the November altcoin rally.
Source: X