Altcoins Surge as Bitcoin’s Dominance Craters—Traders Rush to Capitalize

Bitcoin's iron grip on crypto markets is slipping—fast. As BTC's dominance index nosedives, altcoins are flashing buy signals across the board.

Here's why the smart money's rotating out of blue-chip crypto:

• Ethereum leads the charge with DeFi protocols seeing 3x volume spikes

• Solana and Avalanche soak up developer talent like blockchain sponges

• Even meme coins are posting triple-digit gains (because fundamentals are so 2023)

Wall Street analysts warn this could be another 'alt season' pump—but when has caution ever stopped crypto degens? The last time dominance fell this sharply, altcoins rallied 400% in 90 days. History doesn't repeat... but it sure rhymes.

Just remember: every 'next Bitcoin' eventually becomes somebody else's tax write-off.

BTC dominance reached 63.34% as of July 16, based on Coingecko data. Since then, the metric fell to 59.2%, while the dominance of ETH and blue chip altcoins expanded slightly. There are expectations of a slide to 51% dominance in coming weeks. For some analysts, a true altcoin season may start after BTC dominance dips to 55%.

The recent drop in dominance does not preclude other price rallies for BTC. This time around, BTC is not the sole focus, as other assets are added to ETF purchases and corporate treasuries. Altcoins and meme tokens also remain more accessible to retail traders. 

The BTC dominance is still flat in the long term, but is showing signals for a trend reversal in the past few days. The growing altcoin season signals also came from peak performance for solana (SOL), which once again crossed the $200 mark. 

Bitcoin dominance shows altcoin season signals 

Based on previous bull markets, historically BTC dominance must peak and start declining, setting the stage for altcoin growth. The recent sharp drop in BTC dominance from its highs is seen as a signal for a shift to altcoins. 

This cycle, there are additional factors for multiple altcoins, including ETH, SOL, BNB, and even LTC. The assets are being included in corporate treasuries, creating additional spot demand and incentives to hold for the long term. Not all altcoins and tokens fall into this category, and some are growing more slowly. 

However, even assets from previous bull cycles are starting to outperform. Older projects are also reinventing their approach, expanding their apps and available liquidity. While some tokens have been left behind, others are responding to the renewed exuberance. 

Altcoin season index growth accelerated

The altcoin season index by Glassnode is at 51 points, still striking a balance between altcoin and Bitcoin seasons. Other data put the index at 48 points. 

Based on the altcoin ‘buy’ signal, the assets have become more attractive in the past few months. Altcoins are seen as relatively risky, but having a higher potential upside. 

One of the main drivers for the altcoin season is the outperformance of meme tokens. The trend is led by Pudgy Penguins (PENGU), adding over 437% over the last 90 days. SPX6900 (SPX) is the second most prominent outperforming meme, growing by 254% for the past three months. 

Very few of the top 100 coins and tokens had negative performance in the past 90 days. Those tokens belonged to platforms and projects that overpromised, but could not ride the latest HYPE wave.

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