Many observers believe that an altcoin season has begun due to a succession of fresh all-time highs from altcoins and a dip in the Bitcoin dominance metric.
Bitcoin’s (BTC) 65 percent rally from sub-$29,500 on July 20 to a swing high of $48,200 on August 14 took less than a month, reviving positive momentum in the crypto market and reassuring traders who were worried about another extended bear market.
The BTC rally has paused near $46,000, and this period of sluggish trade is allowing altcoins to take the lead. The total market capitalization of the cryptocurrency market has increased by 80% since July 20, as indicated in the graph below. Meanwhile, Bitcoin’s market share has dropped 10% since July 30.
The dominance rate of Bitcoin has been rising in recent weeks, according to TradingView data, but this trend petered out on July 30 when a number of altcoin projects recovered in response to a marketwide oversold bounce, new collaborations, and protocol improvements.
The number of DeFi and NFT initiatives has reached new highs
The main cryptocurrency gainers over the last four weeks have been projects focused on nonfungible tokens (NFTs) and decentralized finance (DeFi).
Axie Infinity Shards (AXS), Solana (SOL), and Terra (LUNA) are three of the top gainers over the last month, with prices breaking out to new record highs on Aug. 17.
As indicated above, the price of AXS soared by approximately 400%, while the prices of LUNA and SOL increased by 340 and 187 percent, respectively.
One noteworthy discovery is that interest in Solana and Terra began to surge many days after the Ethereum network’s London hard fork was implemented.
While the London hard fork brought some positive modifications to the Ethereum network, including a token burning mechanism that could make Ether deflationary, it did little to address the issue of high transaction fees. As a result, competing layer-one systems like Solana and Terra were able to gain market share.