Connect with us
Active Currencies 17799
Market Cap $3,937,646,445,117.60
Bitcoin Share 59.39%
24h Market Cap Change $-2.51

Is altcoin season already here? Answer depends on Bitcoin and…

3min Read

The altseason is potentially not predominantly dependent on BTC.D, but rather the trading volume.

Is altcoin season already here? Answer depends on Bitcoin and...
Share this article

  • Altseason could have started already as there may not be a direct Bitcoin-to-altcoin rotation
  • Money has started to flow out of memecoins and could all be going into altcoins

At the time of writing, the altcoin market cap and CEX volume ratio seemed to present some compelling insights. Not only did the altcoin market cap surge past $1.5 trillion, but the volume ratio of altcoins to Bitcoin stood at 2.7x – A sign of an upcoming altseason.

The hike indicated that stablecoin holders have been shifting towards alts, rather than directly converting BTC to altcoins. Interestingly, this isn’t a straightforward altseason driven by BTC’s dominance though. Rather, it’s been driven by trading volume, marking a shift in market behavior.

While Bitcoin’s influence on altseasons has been traditionally dictated by its market dominance, the ongoing trend entails trading volume is the new barometer for altcoin interest.

Source: CryptoQuant

However, the notion of an altseason could be deceptive. Although trading volumes for altcoins have spiked, this rise is selective, impacting only certain segments of the altcoin market.

This could mean that while some altcoins see significant gains, others might not benefit from the same level of investor enthusiasm. This selective enthusiasm hinted at a more nuanced, perhaps less robust altseason than in previous cycles, where a rising tide lifted all boats.

Where is money flowing into?

Tracking the Futures Open interest for memecoins such as PEPE, BONK, and WIF underlined distinct trends. The sharp decline in the Futures Open Interest for BONK and WIF, and a moderate downtick in PEPE suggested capital may be moving away from these memecoins.

Notably, PEPE’s interest peaked at around $1.20 billion, before descending. BONK and WIF saw highs of around $600 million and a subsequent drop, reflecting potential shifts in investor sentiment.

altcoins altcoin altseason

Source: X

This could imply that investors have been reallocating funds to more traditional alts, seeking stability or new opportunities.

Conversely, this exodus might not signal a full pivot to alts, but could indicate a broader market realignment or a retreat to fiat or stablecoins. Especially given the latest drop.

Why Altcoin Season Index needs to flip?

The Altcoin Season Index, sitting at 33, signaled that the market may be nearing a bottom, rather than being in the middle of an altseason. This index is a measure of alt performance against Bitcoin – A value above 75 means an altcoin season, while below 25 indicates a Bitcoin season.

Right now, altcoins are underperforming compared to Bitcoin, as shown by the index’s position well below the 75 threshold.

For a shift to an altseason, a sustained hike in altcoin strength relative to Bitcoin is needed. Such a hike should push the index upwards towards or past 75.

Source: Coinglass

On the other hand, if the index falls further, it could allude to sustained Bitcoin dominance, possibly driven by investor caution favoring more established assets.

Watching for a trend reversal in the index will be key to anticipating any potential altseason.

Share
Lennox Gitonga is a Financial Market and On-Chain Analyst at AMBCrypto, bringing the rigor of traditional financial analysis to the digital asset space. With a Bachelor of Commerce in Finance, he possesses a strong academic foundation in market principles and investment analysis. His expertise is sharpened by hands-on experience as a professional equities trader and financial analyst, where he honed his skills in analyzing complex market structures. Since transitioning his focus to cryptocurrency in 2019, Lennox has applied this disciplined approach to the blockchain sector. He specializes in providing in-depth analysis on both a technical and on-chain level, interpreting everything from price action and chart patterns to network health and transactional data. At AMBCrypto, Lennox is dedicated to translating this multifaceted data into clear, actionable insights. His work empowers readers by making sophisticated market analysis accessible, helping them understand the key drivers behind cryptocurrency valuations and trends.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.
Thank you for subscribing to Unhashed.