Different this time: ‘Altcoin season’ no longer driven by Bitcoin rotation — Analyst

As a seasoned analyst with years of experience in the tumultuous world of cryptocurrencies, I’ve witnessed numerous market cycles and trends that have come and gone. However, the insights shared by Ki Young Ju, the CEO of CryptoQuant, have piqued my interest. The traditional definition of an altcoin season, where capital rotates from Bitcoin to altcoins, seems to be evolving.


There’s a possibility that the highly anticipated “altcoin rally” (or altseason) in the cryptocurrency market may be approaching soon, bringing joy to speculative investors, but key indicators suggesting this might be so could now be different, as per a well-known market expert.

“Stablecoin liquidity” to determine next altseason

The world of cryptocurrency is undergoing significant shifts, as cycle markers, market configurations, and trading habits are evolving swiftly.

According to CryptoQuant CEO, Ki Young Ju, posted on December 2, the term “altseason” (a period of increased interest and price rise for altcoins) no longer revolves around the asset rotation from Bitcoin.

Young JU proposes that the conventional method of identifying an altcoin season, marked by a shift in capital from Bitcoin (BTC) to altcoins, is no longer relevant. Nowadays, it’s more common for altcoin trading to occur against stablecoins and fiat currencies, rather than BTC.

In simpler terms, even though Ether’s price has increased recently, the total trading volume for altcoins paired with Bitcoin has stayed relatively low during the past few weeks. Additionally, some altcoins like XRP and Solana are close to their maximum historical prices, while Bitcoin’s price has been holding steady below $100,000.

Simultaneously, the graph to the right demonstrates an increase in total altcoin trading volume for stablecoin pairings, mirroring the rise in Ethereum’s price. In simpler terms, as the cost of Ethereum goes up, so does the amount of trading happening with various altcoins paired against stablecoins.

This reflects “real market growth rather than asset rotation,” Ki explained.

This change suggests a deeper, more sustainable evolution in the crypto market, driven by stablecoins’ increased liquidity and stability.

“Stablecoin liquidity better explains the altcoin markets.”

Ki notes that the type of money entering Bitcoin has changed from past market fluctuations. Instead of being fueled mainly by individual investors during past bull runs, this current bull market is predominantly influenced by institutional investments in spot Bitcoin ETFs on the open market.

Currently, the total market value of all cryptocurrencies aside from Bitcoin is yet to reach its peak, suggesting that there’s less influx of new money from users joining crypto exchanges compared to before.

“For altcoins to reach a new all-time high market capitalization, they will require a significant influx of fresh capital to crypto exchanges.”

Altseason is close

It appears that the performance of the alternative cryptocurrencies aligns with a rise in the Altcoin Season Index, suggesting that the Altcoin Season may be approaching, as per the data from Blockchain Center’s index.

“If 75% of the top 50 coins performed better than Bitcoin over the last season (90 days), it is Altcoin Season.”

Over the past 90 days, about 73% of the top 50 alternative cryptocurrencies have surpassed Bitcoin‘s performance. Interestingly, this percentage has been on a steady rise over the last few days and is now almost touching the 75% mark.

Keeping an eye on several leading cryptocurrencies surging to new peaks, it’s crucial for investors to monitor the stability of stablecoins and the Bitcoin Dominance Index. These indicators might hint at the approaching start of an altcoin rally in the coming days.

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2024-12-02 15:41