Crypto markets extended their rally on Thursday, with altcoins and tokens stepping up their game following weeks of relentless growth for bitcoin. The so-called bitcoin dominance index, which tracks the market share of BTC compared with all cryptocurrencies, is fast approaching its lowest levels of the month, a strong sign that altcoin season has returned (or never left).
Altcoin Season Heats Up Again
The total cryptocurrency market capitalization swelled to $280.9 billion on Thursday, marking a new high for the year. The market has more than doubled since the start of 2019 and is up 180% from the December swing low.
While there were no game-changing catalysts that sparked the latest rally, coins like bitcoin cash (BCH), EOS and IOTA (MIOTA) have been on a tear lately.
The BCH price is trading north of $465, having gained 4% on the day. The fourth-largest cryptocurrency by market cap could easily see another 40% gain in the immediate future as the bulls target $600 and beyond. Very little resistance stands in the way of that milestone.
IOTA’s bulls awoke from their slumber this week after the internet-of-things platform made a serious push toward greater decentralization. Read about how IOTA plans to cut out its centralized coordinator here and here.
MIOTA is currently valued at $0.5310, up 3.5% for the day and a whopping 93% over the past three weeks.
Bitcoin SV (BSV) continues to generate new highs in a rally that may have been orchestrated by fake news. Case in point:
Seems someone did it purposely just around the same time BSV pumped just an hour ago.
Completely fake news but “real enough” to trick many Chinese retails pic.twitter.com/qiWtW6Z8bC
— Dovey Wan ? ? (@DoveyWan) May 29, 2019
The privacy-focused Zcash (ZEC) was also among the top performers on Thursday. The ZE price surged 12% to $93.86, its highest level of 2019. Check out Investing Idea: Zcash.
With the exception of Tether (USDT), a semi-dollar-backed stablecoin, all of the top-25 cryptocurrencies reported gains through the early part of the day. Stellar (XLM), Cardano (ADA) and Tron (TRX) each reported gains of 4% or more.
Bitcoin Dominance Recedes
Bitcoin’s share of the overall cryptocurrency market has declined substantially in recent weeks, a strong sign that altcoin season was heating up again.
Expressed as market share, bitcoin’s dominance index fell to 55.2% on Thursday, the lowest since May 3. Bitcoin’s dominance swelled to around 60.5% on May 13 as the leading digital currency made a fast break toward $8,000. At the time, bitcoin’s market share was the highest it had been since the bull market in 2017.
Bitcoin’s declining dominance is viewed positively by market participants because it means there’s greater price independence among the major assets. Bitcoin has long exerted a gravitational pull on the broader market, which means it has an over-sized influence on how altcoins and tokens perform.
Several coins have escaped bitcoin’s immediate velocity through the first five months of the year. These include Binance Coin (BNB), EOS (which has long had unique price independence) and some of the leading small caps like Basic Attention Token (BAT) and Tezos (XTZ).
According to the technical indicators, bitcoin’s dominance index will recede further in the short term, which should give altcoins greater upside potential. Keep in mind that a falling dominance rate isn’t bearish for bitcoin. Quite the contrary.
When bitcoin peaked all the way back in December 2017, its dominance rate had fallen to around 45%. It would later sink as low as 33% in January 2018 as altcoins and tokens finally peaked.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock. Charts via CoinMarketCap and CoinTrader/TradingView.