"Altcoins nearing the end of a 12-month slump versus Bitcoin? Dominance gauge flashes bottoming signal"

Altcoins, which have been in a prolonged downturn amid weakened risk appetite, are showing early signs of recovery against Bitcoin (BTC), according to an analysis.

According to EtherNews, a digital-asset (cryptocurrency) media outlet, the “Others dominance” indicator—which tracks the share of market capitalization held by altcoins excluding Bitcoin—has recently been rebounding. The gauge has recovered to levels seen before the sharp sell-off on Oct. 10 last year, when positions worth about $19.3 billion were liquidated. By contrast, Bitcoin remains about 42% below its peak over the same period.

Typically, when altcoins enter a distribution phase, dominance continues to fall. However, Others dominance has risen about 17% over the past two months, which is interpreted as suggesting that a substantial portion of the forced-selling phase may have run its course.

A similar pattern emerged in 2019–2020. At the time, Bitcoin went on to see further pullbacks, but Others dominance formed a bottom first and did not break down again. It was later seen as laying the groundwork for the subsequent altcoin rally.

The macro backdrop is also providing some supportive signals. The Institute for Supply Management (ISM) index climbed to 52, and the consumer price index posted its lowest level in 4 years and 10 months. A slowdown in gains for gold and silver has also, in past cycles, been interpreted as a signal that preceded a rebound in appetite for risk assets.

Still, volatility tied to the U.S. midterm election cycle remains a variable. A scenario in which prices move sideways in the near term before a trend reversal emerges is also on the table.

The outlet said, “With Bitcoin’s structure still in a cautious zone, the fact that altcoins are no longer weakening versus Bitcoin could be an early sign of the start of a rotation.”