- ETH’s positive outlook has heightened altcoin season calls.
- With BTC faltering below $100K, will the current altcoin season trend be sustainable?
As a seasoned market analyst with over two decades of experience under my belt, I’ve witnessed numerous bull runs and bear markets. The current altcoin season call is intriguing, given the recent surge in Ethereum [ETH] and the subsequent capital rotation to altcoins.
As a researcher, I’ve noticed an intriguing trend emerging in the cryptocurrency market: the long-anticipated altcoin surge seems to be materializing. This observation is based on the significant rise in Ethereum‘s [ETH] value and the growing momentum within the altcoin segment.
As the sector’s health barometer, ETH’s promising outlook added to the altcoin season calls.
Jake Ostrovskis, a trader specializing in options and Over-The-Counter transactions at the market-making firm Wintermute, pointed out that the optimistic sentiment towards ETH is causing funds to shift from traditional investments into alternative cryptocurrencies (altcoins).
Could this situation be unique (optimistic predictions)? It seems that the market believes it is. The volatility at the money (ATM) is increasing, the skew is reaching its highest point in a year, and there’s a strong demand for options with a 10-day expiration.
The surge in implied volatility (IV) suggested that options traders had a strong, positive outlook for Ethereum’s future performance. If this confidence holds true, it could boost the market for other alternative cryptocurrencies as well.
Altcoin season status
Nicholas Merten of DataDash shared a similar sentiment on YouTube. The crypto analyst cited the dropping Bitcoin dominance (BTC.D) as a precedent for an extra rally for altcoins.
Merten noted that Other altcoins, excluding the top 10, had regained crucial positions and were now above their 200-day moving averages.
This indicated improved momentum in the segment and the possibility for further traction.
Although there has been significant momentum recently, the Blockchain Center’s Altcoin Season Index indicates that we have yet to witness a robust and widespread ‘Altcoin boom’.
In simpler terms, approximately half of the top 50 digital currencies, including Stellar (XLM) and Dogecoin (DOGE), have surpassed Bitcoin’s performance over the last three months, according to the data.
An altcoin season can be called when over 75% top tokens outperform BTC.
will this occasion be distinct and long-lasting?
25th November witnessed a surge for Ethereum, Layer-2 solutions, GameFi, and DeFi sectors, with gains in the double digits. Meanwhile, Bitcoin dropped slightly to a price point under $95,000.
But the creators of Glassnode have warned that for a significant altcoin rally to occur, Bitcoin should first break through the $100,000 mark and then experience a decrease in market dominance. In other words, they suggest that certain conditions must be met before we see a strong increase in altcoins relative to Bitcoin.
To fully experience an altcoin boom, it’s crucial that Bitcoin’s dominance decreases significantly. We’re keeping our eyes peeled for a price point of $100,000, but be aware that a period of market correction might precede this.
Looking at Ethereum (ETH) versus Bitcoin (BTC), the forecast seemed to lean towards cautious optimism. To clarify, when the value of ETH increases relative to BTC, it suggests that ETH is performing better than BTC. This trend is generally considered a positive sign for other alternative cryptocurrencies, or altcoins.
According to Wintermute’s Ostrovskis, the trend in ETHBTC wasn’t definitive enough for a robust and lasting altcoin season, as reported at the time of publication. In other words, he didn’t find it clear that an altcoin rally was imminent based on the current ETHBTC trend.
To experience a significant ‘altcoin season’, where altcoins outperform Bitcoin, Ethereum (ETH) must maintain its power for multiple trading periods beyond just a few sessions. Each attempt to increase in 2024 has been halted, making this trend crucial as we approach the end of the year.
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2024-11-26 21:44