Altcoins
Signs of an Altcoin Season Coming
Wednesday 12 June 2024 ▪ 5 minute read ▪ by Evans S.
The cryptocurrency industry is evolving and each new season brings with it a series of surprises and opportunities. Recently, warning signs suggest that we may be on the verge of a new altcoin season. Are the indicators favourable? Find out in this article.
A Bitcoin Surge: A Harbinger of an Altcoin Season?
Bitcoin may soon wake up from its slumber. At the beginning of the week, its price was around $67,700. The lack of trading volume and speculative interest suggested that the leading cryptocurrency was not ready for a strong uptrend. However, the situation has begun to change in the last 24 hours.
According to data from Distant investors, Bitcoin ETFs recorded an inflow of $886 million on Tuesday, June 4.
This level of massive buying could trigger a major shift and encourage speculators and investors to act.
An influx of funds into Bitcoin ETFs may be a precursor to renewed interest in cryptocurrencies in general. In fact, altcoins could benefit from this.
An analysis of crypto transaction volumes
The recent influx of Bitcoin ETFs could be interpreted as a wake-up call for the cryptocurrency market.
Historically, growing interest in Bitcoin often precedes an altcoin season, in which alternative cryptocurrencies see their prices rise.
This dynamic is explained by the fact that when investors make significant profits with Bitcoin, they tend to diversify their portfolios by investing in altcoins.
Speculators play a crucial role in triggering cryptocurrency market movements. As Bitcoin purchases increase, it is likely that speculators will begin to take a closer look at altcoins.
This attention could quickly translate into increased transaction volumes and prices for altcoins, marking the start of a new altcoin season.
This attention could quickly translate into increased transaction volumes and prices for altcoins, marking the start of a new altcoin season.
Ethernity Cloud founder Iosif Peterfi says:
As Bitcoin shows its resilience after the recent bear market, we should soon see the start of an altcoin season. The current momentum, fueled by growing institutional interest and regulatory clarity, combined with the effects of the halving, places us in a favorable position for a strong rally. We expect a significant shift as altcoins benefit from Bitcoin’s stability, gaining new investor confidence and triggering substantial market activity.
Iosif Peterfi, founder of Ethernity Cloud
The Altcoin Season Indicator: Where Are We?
The altcoin seasonal indicator, according to BlockchainCentre data, showed a value of 31.
This index has dropped from 80 to 31 in the last six months. Interestingly, this indicator was at a high level a year ago, during the bear market where Bitcoin was trading at around $25,000 and altcoins were in a phase of long-term consolidation or decline.
In 2021, from January to June, Bitcoin’s dominance dropped from 72% to 40.4%. During this period, the market capitalization of altcoins (excluding ETH) rose from $122 billion to $934 billion. This pattern suggests that a significant decline in Bitcoin (BTC.D) dominance is necessary for a true altcoin season to begin.
Currently, while other cryptocurrencies may perform well on the Bitcoin hype, only a select few altcoins may outperform Bitcoin. For the altcoin season indicator to surpass 75, there should be widespread euphoria throughout the altcoin ecosystem. However, given the growing number of altcoins, gains may be concentrated in a handful rather than causing a widespread bullish wave.
Bitcoin Dominance: A Key Factor
The Bitcoin (BTC.D) dominance chart represents the market capitalization of BTC as a percentage of the total cryptocurrency market capitalization. Since April this dominance has been in a range between 53.9% and 56.3%.
Currently, it is bouncing off the lows of this range, indicating that Bitcoin is growing faster than the rest of the cryptocurrency market, including Ethereum [ETH].
For a true altcoin season to begin, a strong downtrend on the Bitcoin dominance chart is needed. This would mean that investors are massively shifting their funds from Bitcoin to altcoins, creating a favorable dynamic for an increase in the price of altcoins.
Investors should carefully monitor Bitcoin’s dominance. A significant decline in this dominance could signal the start of an altcoin season. However, it is crucial to remain vigilant and exercise discernment when choosing which altcoins to invest in.
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Evans S.
Fascinated by bitcoin since 2017, Evariste has not stopped researching on the topic. If his main interest is in trading, the sage is desperate to discover all the advanced centers on cryptocurrencies. As an editor, he aspires to consistently provide high-quality work that reflects the state of the industry as a whole.
DISCLAIMER
The views, thoughts and opinions expressed in this article are solely those of the author and should not be relied upon as investment advice. Do your research before making any investment decisions.