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Over the past month, Bitcoin has experienced a significant surge in its price. It has increased by 30%, reaching a new yearly high of $35,000, which is 10% higher than its previous peak this year. However, while Bitcoin’s growth is evident, the rest of the cryptocurrency market has not been able to keep up.
The Altcoin market cap, which represents the total cryptocurrency market cap excluding Bitcoin, has been trading within a descending triangle pattern. This pattern, characterized by lower highs and equal lows, often indicates a bearish trend in the market. It suggests that sellers are gradually overtaking buyers.
However, a breakout from this pattern is typically seen as a bullish indicator, with the target being the first peak. In this case, the Altcoin market cap could potentially see another 15% increase, matching the yearly highs in April.
A similar pattern was observed in the previous cycle, where the Altcoin market cap was trading within a descending wedge. After the breakout, the Altcoin market cap saw a 90% increase. These historical trends highlight the importance of closely monitoring these patterns as potential indicators of market shifts.
Interestingly, while the Altcoin market cap is forming lower highs, Bitcoin’s price is forming new yearly highs. This dynamic suggests that Bitcoin is gaining market share from the rest of the crypto market, leading to what is often referred to as ‘Bitcoin Season’.
Bitcoin’s market share is currently at 54%, the highest it has been in over two years. The last time Bitcoin’s market share was at this level was during the bull market in 2021. As that year progressed, Bitcoin began losing market share as investors turned their attention to coins with lower capitalization for higher returns.
Now, the trend seems to be reversing, with investors gravitating back towards Bitcoin due to its higher returns compared to the rest of the crypto market. If Bitcoin breaches the next resistance at 58%, it could gain an additional 5% in market share.
Historical trends have shown that in the initial phases of bull markets, Bitcoin often takes charge and pushes to create new all-time highs. This is driven by Bitcoin-centric narratives such as the halving, which reduces the new supply of Bitcoin being mined. This year, there is heightened anticipation surrounding the potential approval of a Bitcoin ETF, which could open doors for a wider range of investors to engage with the asset.
Even during the dominant ‘Bitcoin Season’, certain Altcoins have managed to show even more impressive returns. Some notable performers include Injective (+74%), Solana (+68%), PEPE (+67%), RENDER (+45%), and Chainlink (+45%).
Please note that the content provided in this article is for informational and educational purposes only and should not be considered investment advice. It is always recommended to consult a financial advisor before making any investment decisions, as trading and investing involve substantial financial risk. Past performance is not indicative of future results, and no content on this site should be considered a recommendation or solicitation to buy or sell securities or cryptocurrencies.