Key Takeaways
The decline in Bitcoin Dominance and the rise in altcoin market cap indicated a strengthening of the altcoin market. Treasury inflows and ETF buzz fueled bullish sentiment in majors.
Long-term holder confidence in Bitcoin [BTC] and Ethereum [ETH] grew, as large withdrawals of BTC and ETH left exchanges.
Such withdrawals generally indicate an intent to hold the assets long-term and denote market confidence.
Bitcoin dominance slides
Source: BTC.D on TradingView
Bitcoin Dominance fell below the 58.1% mark. The cyan box highlighted a key support/resistance from 2020-21 for BTC.D.
A drop below this support was a positive development for the altcoin market, as it showed capital flow was directed outside Bitcoin.
Source: TOTAL3 on TradingView
The TOTAL3 metric, which tracks crypto market capitalization excluding BTC and ETH, approached a weekly close above $1.13 trillion.
This level was first reached in November 2021 and retested in December 2024, but the price failed to close above it then, showing the significance of the level.
Hence, a weekly session close above this key level would be a sign of bullish strength in the altcoin market.
It does not point to an imminent full-blown altcoin season. Rather, it showed that there was a high chance of altcoins seeing large gains in the coming months.
By the way, it should be noted that not all altcoins are guaranteed to perform well.
Major altcoin narratives are already building
Select altcoins will benefit more from an alt season than their peers.
Among the large-cap altcoins, Solana [SOL] has already witnessed growing treasury plays from institutions. Moreover, Ethereum saw rising interest from institutions in June and July.
For instance, the largest holders, such as BitMine and SharpLink, have added over a million ETH to their treasuries in the past month.
Similarly, SOL saw strong treasury accumulation over the past month as well, with over 2.6 million SOL bought.
The Dogecoin ETF, which has been delayed to next week, saw DOGE prices break past the local resistance at $0.25 and challenge the $0.3 level. Hype around the ETF could spark wider gains for memecoins.
Finally, a potential September rate cut may lift risk assets, starting with Bitcoin. That shift could extend bullish sentiment into the altcoin market.
