Bitcoin's dominance declines: FET, AAVE, DOGE lead a new bull run, is the altcoin season confirmed?

Recently, the performance of various alts has outperformed Bitcoin, reaching new highs. Bitcoin (BTC) has seen a 2% drop in its dominance, indicating that funds are slightly shifting from BTC to altcoins. However, a larger-scale shift may be on the horizon.

According to a recent report by CryptoQuant analyst Joao Wedson, alts such as Aave (AAVE), Dogecoin (DOGE), Maker (MKR), Chainlink (LINK), and the Artificial Intelligence Super Alliance (FET) are showing strong accumulation momentum.

The red bar chart represents the outflow of tokens (cumulative), indicating that these tokens are being transferred from the exchange to the users' personal wallets. This indicates a positive trend as users are moving tokens out of the exchange rather than leaving them on the exchange.

Specifically, Binance's outflow has exceeded its inflow, reflecting an increasing confidence among investors in the rising potential of altcoins. When investors transfer tokens to personal wallets, they tend to hold them for the long term rather than trade frequently, which further reinforces expectations for strong future increases.

Is the altcoin season confirmed?

This question is very interesting because in the first half of this year, the alts market has received quite a few warnings, but none have been as prevalent as the impressive bull market last November. In fact, some alts, such as Hyperliquid (HYPE), have achieved triple-digit gains, while others have fallen significantly. So, will there be any differences this time?

The answer may come from the data of Swissblock. This cryptocurrency analysis company points out, based on its proprietary analysis model, that among the top 100 altcoins, 15% are currently showing positive momentum signals.

Swissblock stated: "We are in the early stages of a recovery cycle for alts. Momentum is awakening: 15% of the top 100 alts are showing positive momentum - the turning point is beginning."

This is a very interesting signal. Swissblock also pointed out: "Last November, a similar momentum signal appeared before the rise of alts. Therefore, we may be in the early stages of another strong altcoin rally."

(Source: Swissblock)

Another interesting factor is the change in USDT dominance. Since the end of June, the dominance of USDT has dropped from 5% to 4.5%. Looking back from April, USDT's dominance has decreased from 6% to 4.5%, a decline of 2.5%. This is the bottom of the second quarter, followed by a strong recovery in the third quarter.

This means that as users sell off USDT and turn to their favorite altcoins, buying pressure is increasing. The fall of USDT indicates that funds are flowing out of stablecoins and into riskier assets, mainly altcoins.

Another indication is the growth of the ETH/BTC ratio. Over the past week, the ratio has increased by 10%, and compared to the low point in June, it has risen by 19% overall. This suggests that some traders are shifting from BTC to ETH, clearly indicating that the altcoin season may be approaching.

(Source: Trading View)

However, at the time of writing this article, the ETH/BTC ratio has reached the 200-day moving average (SMA 200, blue line), which is a key resistance level, and this ratio has been "stuck" at this level for the past two days.

If ETH/BTC can continuously break through the 200-day moving average, it will further confirm the strong rotation of funds from Bitcoin to alts, and drive the altcoin market to strengthen further. Conversely, if the ratio declines, it may limit the recovery momentum of the altcoin market.