Why the Altcoin Season Is Late: A Dostoevskian Tale of Crypto Woes

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Why the Altcoin Season Is Late: A Dostoevskian Tale of Crypto Woes

  • Altcoin season follows Bitcoin’s dominance – Capital shifts when BTC.D declines
  • Several factors could pose a significant threat to altcoin cycles

Bitcoin dominance [BTC.D] is a key metric to track altcoin seasons. When BTC.D drops, it usually means investors are moving into altcoins during periods of market volatility. Alas, in this world of endless speculation and fleeting fortunes, such movements are as predictable as a Russian winter.

However, even with macroeconomic concerns like the upcoming FOMC meeting and Trump’s 2 April ‘reciprocal’ tariffs, Bitcoin’s dominance remains strong. At the time of writing, it had a reading of 61.6%, still a bit below its February peak of 64.3%. One might say, Bitcoin is like a stubborn old general, refusing to yield to the whims of the market. 🤷‍♂️

Interestingly, a closer look at the weekly top gainers revealed that 4 out of the 5 were mid or low-cap altcoins. This shift suggests investors have been moving away from large-cap coins in favor of cheaper, higher-risk options. A gambler’s paradise, indeed! 🎲

Bitcoin’s resilience in the face of altcoin overload

Historically, Bitcoin dominance has served as an important gauge for altcoin seasons. When BTC.D rises, it typically signals that investors are moving their funds into Bitcoin for safety. However, this time, things feel different. For starters, the risk with Bitcoin is higher than usual. Q1 didn’t end as expected – Bitcoin is still stuck below $100k, disappointing many. A true tragedy, one might say. 🎭

Additionally, no rate cuts are expected until at least the end of Q2, keeping the market in a wait-and-see mode. Despite this, the altcoin season is nowhere to be seen. The market, it seems, is in a state of suspended animation, like a character in one of those Dostoevsky novels where everyone is waiting for something to happen. 🕒

Even with Bitcoin holding steady, the altcoin season index sat at 29 at press time, meaning 58% of altcoins are outperforming BTC. Especially the low-to-mid cap coins. However, this was still far below the 75% threshold typically needed to kickstart a true altcoin season. A threshold as elusive as the meaning of life itself. 🤔

A key factor behind this cycle is the rise of Bitcoin ETFs. Just days before Bitcoin hit its all-time high of $109k in January, Bitcoin ETFs saw $1.078 billion in inflows. Since then, millions have poured into these ETFs, keeping capital locked in BTC. This shift has delayed the typical altcoin season, especially as liquidity remains restricted. A tale of greed and speculation, if ever there was one. 💰

The end of the altcoin season?

As of 18 March, there were over 12.88 million digital assets listed on CoinMarketCap, up from 11 million in February. This surge, mainly from memecoins and low-cap tokens, is spreading investor attention thin. A veritable circus of digital tokens, each vying for a moment in the spotlight. 🎪

While Bitcoin dominance holds strong and delays altcoin season, investors are turning to high-risk alternatives. Many tokens are now stuck with market caps between $10,000 and $100,000, locking up capital in short-term assets. This is putting pressure on top high-cap coins. For instance – The ETH/BTC pair, once strong, has now fallen to a five-year low. A fall from grace, if ever there was one. 📉

In conclusion, Bitcoin’s dominance remains strong, with new tokens and the rise of ETFs reshaping the market. The usual flow of capital from Bitcoin to altcoins seems to be fading too, leaving the cryptocurrency firmly in control. A market as complex and unpredictable as the human heart. 💔

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2025-03-19 12:11