Altcoin Season Confirmed as Index Hits 78, Momentum Builds

Key Insights:

• The altcoin season has just begun; the index has already reached 78. This cycle sees two mini Altseasons play out in January 2024 and December 2024.
• Ethereum spot volume has decreased over the past week, while altcoin volume has increased.
• 8 out of 10 CryptoQuant Bull Score Index signals flashed bearish for Bitcoin.

The crypto markets have gradually shifted since April, when Ethereum (ETH) printed its low of the cycle. Ever since, altcoins have been outperforming Bitcoin (BTC), but we have yet to enter the Altcoin season.

However, the current data indicated a total flip concerning the Bitcoin season. The performance of the top 50 cryptos by capitalization showed that the Altseason had begun.

The index reading was 78 when writing, with most outperformance remaining within this group of cryptocurrencies. Avalanche (AVAX), Mantle (MNT), BONK, and Dogecoin (DOGE) all posted substantial gains. Each surged by double-digit percentages in the past 24 hours.

As crypto navigated this seasonal pattern, it was important to note that not every sector and every altcoin will go up. Having said that, let’s dive into the details.

Altcoin Season Is On, But Will the Momentum Last?

The Altcoin season officially kicked off as the index surged past 75. Crypto enthusiasts celebrated the milestone, signaling strong momentum for alternative coins. This figure has historically signaled the start of previous Altseasons.

Per a post by Lourde Sanchez, the average period for an Altseason was only seventeen days historically. On the other hand, the record was 117 days. The longest streak without an Altseason lasted 486 days, more than the total days of such a season (roughly 405).

The analyst said it was still uncertain how long this new cycle would last. This happened as the markets had significantly changed from past cycles. More telling, the current cycle had already experienced two mini Altseasons in January and December 2024.

When writing, round three of the cycle was in play, with more explosions anticipated this month. Analysts noted that altcoins would not replicate similar degrees of success as in 2017 and 2021. At that time, the index almost hit the 100 mark.

What was appealing was the fact that even larger-cap altcoins could pull 3x to 5x in weeks. In fact, this outperformance had not been reflected across the mid and small caps.

Ran Neuner highlighted that the next six weeks could get wild, especially after the bullish PPI data and CPI at 2.9%. In the meantime, there were more analytical reasons to ascertain why the Altcoin Season was up and running.

The 2 Main Reasons Why Altcoin Season Has Begun

The first hint was the magnitude of their volumes. CryptoQuant analyst Maartunn reported that Ethereum spot volume had decreased over the past week, while altcoins had risen.

Altcoin volume dominance was above 45% while ETH was below 30%. The data disclosed how capital had rotated, with altcoins at the receiving end. First, volume was high in Bitcoin, then shifted to ETH.

Another reason was the cooling momentum of Bitcoin. CryptoQuant Bull Score Index indicated that 8 out of 10 signals were bearish on BTC, confirming the current scenario. For BTC, the two bullish hints were Demand Growth and Technical Signal.

This suggested that Bitcoin dominance (BTC.D) was about to plummet, opening more upside potential for mid- and low-cap altcoins. This was yet to rally. BTC.D had broken a rising trendline below 58%, losing the SuperTrend support level.

In conclusion, traders must stay aware of the ever-evolving crypto seasonality as the altcoin season is naturally short. Altcoins won’t all rally at the same time during the season.

Timing entries and exits carefully is key to maximizing gains. Strategic profit-taking can prevent missed opportunities and protect returns.