Crypto traders are signaling that the altcoin market has entered a “reaccumulation stage,” suggesting a potential move towards the “second leg of the cycle” after reclaiming a crucial support area. Independent crypto trader Mags noted on July 25 that altcoins have only risen by 58% since breaking out from a prolonged 525-day accumulation phase.
The accumulation stage is characterized by a market bottoming out, where prices reach local lows and stabilize. This phase is marked by a 33% drop in the TOTAL2 index, which tracks the total market capitalization of all cryptocurrencies excluding Bitcoin, since March 11. During this period, investors typically buy on dips, anticipating future price increases.
Mags shared a chart to illustrate that despite a recent correction, altcoins have surged 58% since emerging from their accumulation phase. This suggests there could be further upside potential. “This pullback is probably just reaccumulation before another leg up,” Mags commented.
Data from Bitformance reveals that over the past three months, the top 200 equal weight index, which assigns equal weight to all cryptocurrencies regardless of market cap, has fallen by over 55% against the market cap index, where cryptocurrencies are weighted based on their market capitalization. This decline indicates that smaller cryptocurrencies have underperformed compared to Bitcoin, implying that the altcoin season has not yet commenced.
Bitcoin’s market dominance, which measures its market share relative to the broader crypto market, is nearing a multi-year high. Currently, Bitcoin’s dominance stands at 56.56%, up 3% over the past 90 days. This shift in market capital indicates that investors have been reallocating funds away from altcoins.
