- Analysts predict the altcoin “mania” phase could begin when TOTAL3 surpasses $1.13 trillion, breaking its 2021 all-time high.
- TOTAL3 remains volatile between $840 billion and $1.1 trillion, with traders adopting short-term strategies.
- Some altcoins, like Bitget Token and Pudgy Penguins, have seen significant gains despite Bitcoin’s dominance nearing 60%.
The altcoin market is standing at the doorstep of a major turnaround. Analysts foresee a euphoric rally once the total market capitalization breaks past a key level. Pseudonymous trader Daan Crypto Trades noted in a post on December 28 that the “mania” phase for altcoins would begin when the TOTAL3 index, which represents the combined market capitalization for all cryptocurrencies except Bitcoin and Ether, breaks its 2021 all-time high at $1.13 trillion and enters price territory saw before.
According to data, TOTAL3 stands at $962.78 billion, which is a remarkable 91.45% increase since the beginning of 2024. However, according to Daan, volatility will probably continue to persist in the market until it convincingly breaks above the $1.1 trillion level. “As long as this trades between ~$840 billion and ~$1.1 trillion, I think it will be choppy,” he said, adding he is warned below $800 billion.
Daan’s sentiment is a reflection of broader observations of increasing volatility in the crypto market. Traders have become more short-term-minded, analysts said, which only serves to amplify price swings. Daniel Cheung, co-founder of Syncracy Capital, tweeted on December 28 that many traders are now focused on hourly charts and leveraging trading, placing their approach more in line with the legendary investor George Soros.
“Everyone decided they were George Soros all of a sudden this cycle,” Cheung remarked, attributing this behavior to slower breakouts compared to previous market cycles.
Altcoins Gaining Momentum Over Bitcoin Dominance
Despite the choppy market conditions, some altcoins have delivered notable gains. According to data, the top-performing cryptocurrencies over the past week are Bitget Token (BGB) by 80.65%, Virtuals Protocol (VIRTUAL) by 42.30%, and Pudgy Penguins (PENGU) by 31.63%.
Meanwhile, Bitcoin dominance has climbed back to nearly 60%, signaling a potential shift in trader strategies. With Bitcoin prices consolidating, many traders are now turning their attention to altcoins, which offer a more attractive risk-reward profile.
“Altcoins, at this juncture, offer a far more optimal R/R [risk-reward] profile than Bitcoin does,” said pseudonymous trader Dyme in a December 27 post on X. “Time to DCA Bitcoin is over for another 1.5+ years.”
As the year wears on, TOTAL3 becomes closely watched by market participants. A break above $1.13 trillion could signal the start of the highly-publicized altcoin season, characterized by rapid price appreciation and sharp enthusiasm in the markets. Until then, traders are bracing for continued turbulence, with many of them adjusting their strategies to the prevailing conditions.
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