A weakening Bitcoin presence could give altcoins the moonshot they have waited for for three years.
Bitcoin (BTC) revisited recent lows near $52,000 on Thursday as sustained weakness continued for the largest cryptocurrency.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Traders await altcoin “magic”
The move came as Bitcoin was about to lose its market cap dominance supremacy to altcoins in what traditionally marks the “real” start of the “alt season.”
Charts from on-chain monitoring resource CoinMarketCap showed that as of Thursday, Bitcoin’s share of the overall cryptocurrency market capitalization stood at just 50.1%.
Having decreased sharply this year despite its own price gains, Bitcoin’s market cap share versus altcoins looked set to break through support, which has held for over three years.
Looking at historical behavior, each time Bitcoin loses the 50% mark, altcoins rapidly move in to pick up the slack, often led by Ether (ETH).
The reshuffling thus sparks an altcoin run that truly fits the description of an “alt season” — rapid gains to a peak followed by a cooling-off period as Bitcoin regains some lost ground. This was the case in both mid-2017 and early 2018.
Cryptocurrency market cap share chart. Source: CoinMarketCap
Should history repeat itself, it would be music to the ears of altcoin investors, many of whom have long claimed that an “alt season” is already underway but has yet to show its true colors.
A race to the top this time around could surprise even them, meanwhile, as many altcoins have already put in unbelievable performances in 2021.
“BTC dominance 51.6%. The magic starts when 50% breaks,” popular Twitter account CryptoBull summarized last week.
Market breaks Dogecoin’s spell
At the time of writing, Ether in particular was showing no signs of weakness in the face of fresh wobbles for BTC/USD, gaining 6% in 24 hours to approach $2,500 once again.
Others were less optimistic, with the top 50 cryptocurrencies mostly down on the day.
DOGE/USD 1-hour candle chart (Bittrex). Source: TradingView