Altcoins Poised for August Highs Amid Strong Bullish Momentum

Bitcoin Dominance Drop Fuels Altcoin Mega Season

Altcoins are giving positive indications of a massive rally, as most of the market indicators are aligning towards the possible mega altseason.

Analysts note that the Bitcoin dominance has started a major downward trend, and this has traditionally been associated with major capital rotations into other cryptocurrencies.

In addition, the global liquidity conditions are also becoming more favorable, and Ethereum is gaining traction over BTC, which supports the possibility of high price gains in the altcoin market.

This arrangement is very similar to what was observed in 2017 and 2021 and these two eras were followed by massive altcoin runs and as such, analysts are now anticipating new highs in August.

Bitcoin Dominance Signals Pending Altcoin Rally

Bull Theory suggests that Bitcoin supremacy on the weekly chart is now below its 50 week moving average and is in obvious technical distress.

Also, a bearish MACD crossover further makes the argument that further decline to the 45% dominance level is likely, where historical price movements in previous cycles have resulted in 10x-50x increases in the price of altcoins.

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With a decreasing Bitcoin dominance, funds tend to move quickly into altcoins, and such rotation can lead to abrupt and widespread price increases.

Analysts believe that the present market configuration is among the most potent altseason indicators in recent years. 

Furthermore, Bitcoin’s returns have remained largely flat during the same period, which has encouraged more traders to shift toward altcoins.

Global Liquidity Reversal Adds Fuel to Altcoin Momentum

CryptoNobler has pointed out that the Global Liquidity Index has turned upwards again since 2021, and this turn occurred in the past as the beginning of large-scale altcoin rallies.

Since liquidity is usually associated with a higher risk appetite, when the macro environment is conducive, investors usually rotate into riskier assets like altcoins as they are higher-beta assets.

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The historical charts also indicate that Golden Cross patterns in liquidity patterns always preceded a robust crypto bull run. The current reversal is consistent with a strengthening of the macroeconomic prospects, such as the potential interest rate reductions.

Historical Patterns Suggest Imminent Breakout for Altcoins

Mister Crypto observes that the TOTAL2 index that is an indicator of the market cap of all cryptocurrencies other than Bitcoin is currently replicating its breakout structure of 2021.

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The subsequent vertical rallies in altcoins (some of which registered over 1,000%) that followed similar technical setups in the past are attracting intense attention as to whether this would be repeated.

Merlijn The Trader continues to say that each past altseason started with the same chart pattern as we are seeing now in various timeframes, a bullish cross and a consolidation period below significant resistance.

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In addition, Wimar.X predicts that altcoins will see a new all-time high in August since broken RSI resistance, good sector performance, and increased on-chain activity all point in that direction.

According to Glassnode, the performance of most crypto sectors has been higher than that of Bitcoin in the last month, with Ethereum performing best in the large-cap category. Tokens associated with staking have posted the best performance on the whole.

Thus, critics indicate that as long as Bitcoin is in a state of consolidation at one of its highs, altcoin strength may trigger a major market-wide repricing and even the most violent altseason since 2021.