Altcoins
Signs of an Altcoin Season Coming
5:00 p.m. ▪ 5 min reading ▪ by Evans S.
The crypto sphere is evolving, and each new season brings its share of surprises and opportunities. Recently, warning signs suggest that we may be on the cusp of a new altcoin season. Are the indicators favorable? Find out in this article.
A Bitcoin Surge: A Harbinger of an Altcoin Season?
Bitcoin could soon wake up from its slumber. At the start of the week, its price hovered around $67,700. The lack of trading volume and speculative interest suggest that the leading cryptocurrency was not ready for a strong uptrend. However, the situation has started to change over the past 24 hours.
According to data from Distant investors, Bitcoin ETFs saw 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 harbinger of renewed interest in cryptocurrencies in general. Indeed, altcoins could well benefit from it.
An analysis of crypto trading volumes
The recent influx of Bitcoin ETFs could be interpreted as a wake-up call for the crypto market.
Historically, increased interest in Bitcoin often precedes an altcoin season, where 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. With Bitcoin purchases increasing, it is likely that speculators will begin to take a closer look at altcoins.
This attention could quickly translate into an increase in altcoin trading volumes and prices, marking the start of a new altcoin season.
This attention could quickly translate into an increase in altcoin trading volumes and prices, marking the start of a new altcoin season.
Ethernity Cloud founder Losif Peterfi says:
As Bitcoin shows its resilience after the recent bear market, we should soon witness the start of an altcoin season. Current momentum, fueled by growing institutional interest and regulatory clarity, combined with the effects of the halving, puts us in a favorable position for a strong recovery. We expect a significant shift as altcoins take advantage of Bitcoin’s stability, regaining investor confidence and triggering substantial market activity.
Losif Peterfi, founder of Ethernity Cloud
The Altcoin Season Indicator: Where Are We?
The altcoin season indicator, according to data from BlockchainCentre, showed a reading of 31.
This index has fallen from 80 to 31 over the last six months. Interestingly, this indicator was at a high level a year ago, during the bear market where Bitcoin was trading around $25,000, and altcoins were in a consolidation or long-term decline phase. .
In 2021, from January to June, Bitcoin dominance fell from 72% to 40.4%. During this period, the market capitalization of altcoins (excluding ETH) increased from $122 billion to $934 billion. This trend suggests that a significant decline in Bitcoin (BTC.D) dominance is necessary for a true altcoin season to begin.
Currently, even though other cryptocurrencies may perform well due to the enthusiasm for Bitcoin, only a select few altcoins could outperform Bitcoin. For the altcoin season indicator to rise above 75, there would need to be widespread euphoria in the altcoin ecosystem. However, given the growing number of altcoins, gains could be concentrated in a handful rather than causing a widespread bullish wave.
Bitcoin dominance: a key factor
The Bitcoin Dominance Chart (BTC.D) represents the BTC market cap as a percentage of the total crypto market cap. Since April, this domination 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 crypto market, including Ethereum. [ETH].
For a true altcoin season to begin, a strong downward trend in the Bitcoin dominance chart is necessary. This would mean that investors are massively moving their funds from Bitcoin to altcoins, creating favorable dynamics for an increase in the price of altcoins.
Investors should closely 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 never stopped researching the subject. If his first interest was in trading, he is now actively trying to understand all the advances centered on cryptocurrencies. As an editor, he aspires to continually deliver high-quality work that reflects the state of the industry as a whole.
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.