Altcoin market enters re-accumulation phase, traders say
Crypto traders are suggesting that the altcoin market has entered a “re-accumulation phase” and may be heading towards “phase two of the cycle” after recapturing key support areas. Independent crypto trader Maggs noted on July 25 that altcoins have only risen 58% since exiting a 525-day long accumulation phase.
The accumulation phase is characterized by a market bottoming, where prices reach local lows and stabilize. This phase has been marked by a 33% drop in the TOTAL2 index, which tracks the market capitalization of all cryptocurrencies except Bitcoin, since March 11. During this period, investors typically buy at low prices in anticipation of future price increases.
Maggs shared a chart showing that despite the recent correction, the altcoin has surged 58% since coming out of the accumulation phase, suggesting further upside is possible. “This pullback is probably just a re-accumulation before the next upside phase,” Maggs commented.
According to data from Bitformance, over the past three months, the top 200 equal-weighted index, which assigns equal weighting to all cryptocurrencies regardless of market capitalization, has fallen by more than 55% against a market cap index that weights cryptocurrencies based on their market capitalization. The decline indicates that smaller cryptocurrencies have underperformed relative to Bitcoin, suggesting that altcoin season has not yet begun.
Bitcoin market share, a measure of market share relative to the broader cryptocurrency market, is nearing its highest level in several years. Currently, Bitcoin’s market share is at 56.56%, up 3% over the past 90 days. This shift in market capitalization indicates that investors are reallocating funds away from altcoins.
