Altcoins
Are Ethereum ETFs the trigger for altcoin season? The experts step in!
- ETH/BTC has recovered higher with analysts predicting that a new season could be likely.
- However, the altcoin market has shown varied performance and may not recover uniformly.
Altcoin Season calls have increased recently, and the Ethereum [ETH] ETFs have stepped up the calls. As the altcoin market leader, ETH’s rise represents the barometer of altcoin season for most analysts.
According to Crypto Nova, a pseudonymous crypto analyst, the ETH/BTC ratio was on the verge of explode and would rally altcoins.
“Always, when ETH/BTC rose, the entire altcoin market rose. And it seems to be happening very soon.
Another analyst, Michael van de Poppe, echoes The projection of Nova and declared:
“As long as #Ethereum stays above 0.05 BTC, a new trend has started: up.”
Source: X/de Poppé
For those unfamiliar, ETH/BTC tracks the performance of ETH relative to BTC. At press time, the ETH/BTC ratio stood at 0.055, meaning one ETH was worth approximately 0.055 BTC.
A rise in the ratio value will suggest a positive performance of ETH and possibly an altcoin season. However, a decline in value will denote the underperformance of ETH compared to BTC.
The ETH/BTC ratio jumped due to speculation on the ETH ETF. The value could increase if the spot ETH ETF launches and begins trading, boosting the rest of the altcoin market.
Altseason wasn’t here yet
However, another key indicator of the alternate season, the Altcoin Season Index, had a reading of 37, which indicated the season had not yet started. Notably, the Altcoin Season Index signals an altseason if 75% of altcoins outperform BTC over the past 90 days.
However, it is worth noting that some altcoins performed exemplary during the rally while others struggled.
Meme pieces have been outliers, with Pepe [PEPE] regularly printing records recently. In terms of performance since the start of the year, PEPE is up +950%, and dogwifhat [WIF] jumped +120% over the same period.
However, other altcoins are lagging behind, with Ethereum L2 underperforming. According to the recent Deribit report comment,
“OP, MATIC and ARB are down 33%, 26% and 24% respectively. This means that 1 ETH invested in OP at the beginning of the year is only worth 0.4 ETH today. This underperformance is not solely due to the ETH ETF, nor is it due to broader altcoin underperformance.
The Deribit report mentions that the oversupply of token unlocks could be one of the reasons for L2’s poor performance.
“$82 million in OP releases hit the market; the previous week there was almost the same amount of ARB’
On alternative L1s, performance varied, “some L1s are overperforming (TON +197%, NEAR +97%), while others, like APT and AVAX, are underperforming.”
So, a potential increase in the ETH/BTC ratio will not necessarily boost all altcoins; it could be selective.