The cryptocurrency market shows potential signs of the imminent altcoin season. Marketwatchers cite the confluence of technical, emotional, and macroeconomic factors that could lead to important gatherings for Altcoins.
The outlook fell approximately 37.6% in early December 2024, following a significant recession in the Altcoin market. As of the latest data, the market capitalization is $1.1 trillion.
Is the Altcoin season coming?
From a technical standpoint, Bitcoin (BTC) dominance appears to be at an important turning point by measuring Bitcoin’s market share compared to the total cryptocurrency market.
A recent chart shared by X’s Crypto analyst Mister Crypto highlighted the rise in control of Bitcoin, followed by a wedge pattern. This pattern is generally considered a bear signal, and often leads to a sudden pullback.
“The advantage of Bitcoin will collapse. The alto season will come. Everyone will be rich this year!” he wrote.
Additionally, another analyst supported these findings, noting that Bitcoin’s advantage peaked. Therefore, he predicted a subsequent recession.
However, the Altcoin Season Index has dropped to a low of 16. This is an index that analyses the performance of the top 50 Altcoins against Bitcoin indicates that Altcoins currently performs poorly.
In particular, this level reflects the bottom of Altcoins observed around August 2024. This period preceded the important Altcoin Rally, with the index peaking at 88 by December 2024.
Finally, from a macroeconomic perspective, a 90-day delay in the implementation of Donald Trump’s tariffs has renewed market confidence. This delay is perceived as a positive signal and potentially promotes capital inflows into Altcoins.
“90-day tariff suspension = 90-day alto season,” analysts argued.
Additionally, analyst Crypto Rover pointed to quantitative relaxation (QE) as a catalyst for AltSeason. He said that when central banks began to put their funds into the economy (through QE), Altcoins could experience a massive price surge, benefiting from increased liquidity and investor optimism.
“When QE begins. The Altcoin season will be a massive comeback!” he said.
However, in the latest report, Kaiko Research highlighted that the traditional Altcoin season may no longer be possible. Instead, potential rallys can be selective, with only a few altcoins experiencing important benefits. The focus may be on real-world use cases, strong liquidity and assets with potential to generate revenue.
“The alto season could be a thing of the past, and the correlations between cryptocurrencies diverge significantly over time, which may require more nuanced classifications beyond mere “altcoins,”” the report states.
Kaiko Research noted that increasing concentrations of liquidity in some Altcoins and Bitcoin could disrupt the typical capital flows in Altcoins during market rises. Furthermore, its position in the market will be further strengthened as Bitcoin becomes more widely adopted by institutions and governments as a reserve asset.
Ultimately, the sign points to a potential Altcoin Rally, but it is clear that the future of Altcoins could contain more subtle market dynamics.
Disclaimer
In compliance with Trust Project guidelines, Beincrypto is committed to reporting without bias and transparent. This news article is intended to provide accurate and timely information. However, we recommend that readers independently verify the facts and consult with experts before making decisions based on this content. Please note that our terms and conditions, privacy policy and disclaimer have been updated.
