Metric analysis

Bitcoin dominance hits 6-month lows as metric proclaims new ‘alternative season’

Bitcoin (BTC) faces new competition from altcoins this month, as data shows that – technically – it’s already “alt season”.

Figures of CoinMarketCap and TradingView show that BTC is currently around 41% of the overall crypto market capitalization – its lowest since the start of 2022.

Bitcoin loses its market capitalization prowess

After suffering at the hands of the collapse of Terra LUNA – now renamed Terra Classic (LUC) – altcoin markets have recovered significantly in recent months.

Alongside Bitcoin’s comeback from an 18-month low of $17,600 in June, altcoins have had their own renaissance, one that is now giving Bitcoin bulls a run for their money.

According to CoinMarketCap, Bitcoin’s market capitalization share is now at its lowest since mid-January, with the larger altcoin Ether (ETH), in particular, stealing the show in recent weeks.

From a low of 14.3% on June 19, Ethereum’s market cap dominance now stands at 19%.

1-week candle chart of Bitcoin market cap dominance. Source: Trading View

The case for altcoin betting is further bolstered by a dedicated metric responsible for calling “altseason” – a period when altcoins eclipse Bitcoin as investments.

With a normalized score of 94/100, the Altcoin Season Index currently boasting its most compelling alternate season reading since June 2021.

The closer the score is to zero, the more the metric favors Bitcoin over altcoins. The alternate season is once called “75% of the top 50 coins outperformed Bitcoin in the last season,” its description says, adding that a “season” equals the last 90 days.

Altcoin Season Index (screenshot). Source: Blockchain Center.

Bitfinex ETH Long Bets Drop to May Lows

Controversy over the upcoming Merge event, meanwhile, has meant that ETH performed similarly unconvincingly for short periods this week.

Related: What is the crotch? Ethereum’s Potential Forked ETHW Token Is Trading Under $100

In the 24 hours leading up to the August 9 write-up, ETH/USD was down almost 7%, while BTC/USD lost $1,000 in hours on the day.

Nervousness over the August 10 reading of the U.S. consumer price index (CPI) contributed to the decline, analysts including Cointelegraph contributor Michaël van de Poppe said. argued.

On-chain monitors, meanwhile, noted that a major exchange Bitfinex had significantly reduced its long exposure to ETH, indicating a belief that the downside was all but guaranteed next.

As of this writing, long positions were at the same level as immediately before the Terra incident in May.

ETH/USD runs alongside the 1-day candles chart (Bitfinex). Source: Trading View

Van de Poppe nonetheless called for restraint when it comes to the upcoming ETH price action.

“People are already posting $300 or $600 targets for Ethereum on the first slight correction,” he said. tweeted.

“It is literally not necessary, despite the fact that people are strongly stuck in their bias. Because of this bias, they will not be able to watch the markets objectively.”

ETH/USD 1 hour candle chart (Binance). Source: Trading View

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