FET, AAVE, DOGE are leading the new bullish wave – is the breakout alt season coming?

Some altcoins have recently demonstrated superior strength compared to Bitcoin by reaching new all-time highs. The 2% fall in BTC's dominance rate is a signal indicating a small capital rotation from BTC to altcoins. However, a larger shift may be about to occur.

According to a recent report from analyst Joao Wedson of CryptoQuant, there is strong accumulation on altcoins like Aave (AAVE), Dogecoin (DOGE), Maker (MKR), Chainlink (LINK), and Artificial Superintelligence Alliance (FET),…

Red bars indicate the outflow of accumulated ( of tokens, meaning these coins are being transferred from exchanges to users' personal wallets. This shows a positive trend, as users are moving money off the exchange rather than leaving it on the exchange.

Specifically, Binance has recorded an outflow of funds that significantly exceeds the inflow, reflecting the increasingly strong confidence of investors in the breakout growth potential of altcoins. When investors transfer tokens to personal wallets, they often tend to hold them long-term, rather than trading frequently, which further reinforces expectations for a strong growth surge in the future.

Is the altcoin season confirmed?

This is a very interesting question given the appearance of some warnings about the altcoin season in the first half of this year, but there are no warnings similar to the impressive price surge of the market last November. In fact, some altcoins like Hyperliquid )HYPE( have seen triple-digit growth, while some other altcoins have fallen sharply. So is there anything different this time?

The answer may come from data from Swissblock. This cryptocurrency analysis company has noted that 15% of the current top 100 altcoins are showing positive momentum signals, according to their proprietary analysis model. Swissblock stated:

"We are in the early stages of the altcoin recovery cycle. The awakening momentum: 15% of the top 100 altcoins are showing positive momentum—the rotation is beginning."

This is a very noteworthy signal. Swissblock also notes that a similar momentum signal was warned before the altcoin price surge last November. Therefore, we may be at the early stage of another strong altcoin season.

Another interesting factor is the change in the dominance rate of USDT. Since the end of June, this rate has fallen from 5% to 4.5%, and if tracked from April, the dominance rate of USDT has decreased a total of 2.5% from 6% to 4.5%. This is the low point of Q2 and then saw a strong recovery in Q3.

This means that buying pressure increases as users sell USDT and switch to their favorite altcoins. The decline in USDT.D indicates that capital is flowing out of the stablecoin and into riskier assets, primarily altcoins.

Another sign is the growth of the ETH/BTC ratio. Over the past week, this ratio has increased by 10%, and in total, from the lowest point in June, it has risen by 19%. This indicates that some traders are shifting from BTC to ETH, which is a clear sign that the altcoin season may be approaching.

![])https://img-cdn.gateio.im/webp-social/moments-07922beeb786cc46facd91b8ad70c52b.webp(The dominance ratio of USDT and the ETH/BTC ratio | Source: TradingViewHowever, at the time of writing, the ETH/BTC ratio has reached the 200-day moving average )SMA 200, the blue line(. This is an important resistance level, and this ratio has been “capped” at this level for the past two days.

If ETH/BTC can sustainably break through the 200-day SMA, this will further confirm the strong capital rotation from BTC to altcoin and drive the altcoin market to develop more robustly. Conversely, if this ratio falls, it may limit the recovery momentum of the altcoin market.

Emma