The altcoin season remains elusive this year as Bitcoin dominance has stayed in control.
Summary
- Altcoin Season Index dropped to 52 from over 60 YTD, showing Bitcoin dominance.
- Fed rate cuts could trigger risk appetite, historically bullish for crypto.
- ETF approvals for XRP, DOGE, HBAR in October could spark demand.
Data shows that the Altcoin Season Index has slumped to 52 from the year-to-date high of over 60. Here are the top three reasons why the altcoin season may still happen this year.
Federal Reserve cuts to trigger an altcoin season
The first main catalyst for the altcoin season is the Federal Reserve, which will start to cut interest rates in the coming meeting. Odds of a cut rose after the US published weak non-farm payrolls data.
The data showed that the economy created just 22,000 jobs in August, much lower than the 75,000 created in the previous month. It also showed that the unemployment rate rose to 4.3% in August, while wage growth slowed.
Historically, risky assets like cryptocurrencies and stocks thrive when the Fed is cutting interest rates and plunge during the hiking cycle.
Ethereum price technicals point to a rebound
The other catalyst for the altcoin season is the upcoming Ethereum (ETH) surge. Ethereum’s performance is notable because it has the biggest weighting in the Altcoin Season Index.
The daily time frame shows that the coin has formed a bullish pennant pattern. This pattern comprises a vertical line and a symmetrical triangle.
Additionally, Ethereum is hovering at the strong pivot reverse point of the Murrey Math Lines. This means that it may soon rebound and possibly reach the extreme overshoot level of $5,625, a 31% increase from the current level.
ETH price chart | Source: crypto.news
Altcoin ETF approvals
Further, the altcoin season may happen as October approaches. The Securities and Exchange Commission has set the final deadline for most altcoins during the month. Some of the top coins that could receive their approvals are Ripple (XRP), Dogecoin (DOGE), and Hedera Hashgraph.
Altcoin ETF approvals may lead to further gains, as they are expected to increase demand from American investors. Ethereum funds have had over $13 billion in inflows since their inception, and the same could happen to other tokens.
