Key Takeaways
Market data showed massive accumulation for several altcoins. In fact, a positive impulse signal for alts was triggered, suggesting that we could soon witness an explosive altseason.
Selected altcoins have outperformed Bitcoin [BTC] after it printed a new record high recently.
And the 2% drop in BTC dominance showed that a small capital rotation from BTC to altcoins had happened. But a larger rotation could soon follow.
In a recent report, CryptoQuant analyst Joao Wedson highlighted massive accumulation across Aave [AAVE], Dogecoin [DOGE], Maker [MKR], Chainlink [LINK], Artificial Superintelligence Alliance [FET], and more.
Source: CryptoQuant
The red bars show outflows (accumulation) of tokens moved from exchanges to users’ wallets. Binance saw more outflows than inflows, suggesting growing conviction of a likely surge.
Positive altcoin shift confirmed?
Worth pointing out that there have been several altcoin season calls in H1, and none have materialized similar to last November’s broader market surge.
A select number of altcoins like Hyperliquid [HYPE] raked in triple-digit rallies, while others dumped harder. So, is this time any different?
Well, Swissblock data suggests so. The crypto insights firm flagged that 15% of the top 100 altcoins had a positive impulsive signal per its proprietary model. It added,
“We’re in an early altcoin recovery cycle. Impulse awakening: 15% of top 100 alts show positive impulse—rotation is starting.”
Source: Swissblock
Per Swissblock, the same impulse signal was flagged before last November’s altcoin bull run. This meant that we could be in the early innings of a strong altcoin season.
Additionally, the buying power and rotation have been happening subtly since mid-June. Notably, the USDT dominance has dropped from 5% to 4.5% since late June.
When tracked from April, USDT.D has declined by 2.5% from 6% to 4.5%. This marked the Q2 bottom and subsequent recovery into Q3.
It meant buying pressure increased as users ditched their USDT for their favourite altcoin gems.
Source: TradingView (USDT dominance vs. ETH/BTC ratio)
A similar trend was observed last November and mirrored the ETH/BTC ratio surge, too. ETH/BTC ratio surged 10% this week, an overall 19% pump since June lows.
In other words, some traders rotated from BTC to ETH, another positive sign for altcoin season.
However, at the time of writing, the ETH/BTC ratio tagged the 200-day Simple Moving Average (SMA, blue line). It has been capped at this level for the past two days.
A sustained rally above the dynamic level (200-D SMA) could confirm the capital rotation and lift the altcoin sector even further.
On the flipside, a drop in the ETH/BTC ratio could cap the altcoin market recovery. It remains to be seen whether the trend will extend.
