The crypto market has been all over the place during the past couple of months. All of a sudden, Bitcoin hits a new all-time high, and then before you know it, the market is bleeding. This has caused chaos as the crypto traders and investors try to understand the market movements. Two questions hang in the air as we try to understand what is actually happening. The first is about the bull run, and the second is about whether the altcoin season is still in play.
The bull run usually occurs post Bitcoin halving. The Bitcoin halving event, which occurs every four years, slashes the rewards given to the miners in half and thereby reduces the amount of BTC supply released into the market. After every event, the market has a new top and Bitcoin reaches a new all high.
The latest Bitcoin halving event happened in 2024, and the top crypto reached a new all-time high just around a month ago and hit approximately $124K. However, analysts and the whole crypto market were looking for something bigger; some said it should hit $150K, others expected $200K. $124K was not something the community expected and accepted as the end of a bull run.
Now the question is whether the analysts set the bar a little too high, and have those premeditated beliefs taken a strong grip on the community, which has made them deny $124K as the top. Let’s see what the charts have to say. If there is yet another bull run, then BTC could aim higher; however, in the event that there is no rally, then we could take $124K as the top.
Total crypto market cap has a major obstacle
For instance, the total crypto market capitalization is currently below $3.6 trillion, an area where the supply has always been higher, and thereby the demand and prices have been down. With this excess supply, there could be wild highs near this area; however, the total crypto market cap will need to make a clean close above the $3.6 trillion level for the cycle to continue its uptrend.
Furthermore, in terms of the downside for the total market cap, it can fluctuate between this $3.6 trillion and the confluence of the two black dotted lines close to $2.2 trillion. This support level has been historic for the total market cap to hold its directional movement; therefore, unless the total market cap crashes below this level, the bull run is on and a new all-time high for BTC could be expected.
Altcoin season index crashes, so does BTC dominance
The altcoin season is a cycle in the cryptocurrency realm where Bitcoin loses its dominance, and the community takes their money out of BTC and invests in altcoins. The Altcoin Season Index is a tool that moves to higher values when 75% of the top 50 cryptocurrencies outperform Bitcoin. Lately, the ASI has been fluctuating wildly; it hit 100 and then crashed to 39, the present value on its scale. So is the altcoin season over, or will it happen?
Although the ASI is in the neutral zone (between 25 and 75), a crypto netizen by the pseudonym MerlijnTrader stated that every altcoin season starts when everyone disbelieves.
From another perspective, the Bitcoin dominance should fall for the altcoin season to take over. If you look at the chart below, Bitcoin’s dominance, which was always above the 50-day moving average since 2023, has crashed below this support level. This is quite a significant moment in the crypto market. Not only did the Bitcoin dominance crash, but it was also rejected when it tried to climb above the 50-day moving average.
When comparing how BTC dominance behaved during the 2021 altcoin season with what’s happening now, there is something very similar. In 2021, when Bitcoin dominance crashed below the 50-day moving average, the altcoin started to rally. With the BTC dominance below the 50-day MA, this will be the start of the crash, which alternatively means the altcoin season.
