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Bitcoin’s market capital has doubled while the altcoins market capital remains below its highest level.
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Analysts are predicting a possible altcoin season after Bitcoin’s cycle high.
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The golden cross in the altcoin’s market cap indicates a possible breakout.
Bitcoin’s market capitalization has been soaring to new heights for the majority of 2024’s 3rd quarter.
The altcoin market capitalization hasn’t kept up, and is still below its previous high, causing concerns about capital flow.
Altcoin Season Index – Not yet in “Alt Season Territory”
Altcoin Season Index, a measure of market cycles, is currently at 26. This is below the threshold needed to confirm that altcoins are dominating. This indicates that Bitcoin is still the dominant currency, but a shift to altcoin season may occur if Bitcoin begins a decline or stabilizes.
Is Altcoin season imminent?
In a tweet CryptoQuant CEO Ki Young Ju referred to the altcoin markets as a “zero sum PvP game” where assets rotate among themselves without new capital inflows.
According to him, only a few projects with real-world applications will reach new heights in this cycle.
Related: When will altcoin season be in February 2025? A Look at the Bullish Signals
Despite this, analysts believe that an altcoin breakout will soon occur. Crypto Rover stated that Bitcoin’s bull run has “80% been completed” and the next 20% are expected to be volatile. Altcoins have historically rallied after Bitcoin reaches the top of its cycle, indicating a possible shift.
Golden Cross: A historically bullish sign for Altcoins
Crypto analyst Ted noted that the altcoins market cap experienced its first golden crossing since early 2021. A golden cross is formed when the 50-day average crosses over the 200-day average.
This cross has historically been a sign of a strong upward trend. In 2021, a golden cross was seen before a 500% increase in altcoin capitalization within 1-2 months.
Crypto Goos, on the other hand, reinforced this sentiment by predicting that “altcoins will make a big comeback” in the near future and that investors may see significant gains.
Why is the Altcoin Season different from normal?
The debate about altcoin season is still ongoing. Although technical indicators indicate a bullish outlook for the altcoin markets, Ki Young Ju’s observation that there is no new capital entering the market raises concern.
Miles Deutscher, a crypto analyst, believes that the introduction Bitcoin ETFs have altered the traditional market cycles. In the past, Bitcoin’s halving cycles led to an increase in wealth, which prompted investors to reinvest their money in altcoins.
RelatedAltcoin season MIA? Raoul Pal Reveals His Crypto Portfolio, Sui is Ahead of Solana
Deutscher points out that this cycle has slowed down because Bitcoin ETF holders primarily hold BTC via traditional financial markets and not crypto exchanges. These ETFs settle their funds in U.S. Dollars, so there is little capital flowing into Ethereum or other altcoins.
Glassnode data confirms this claim by highlighting a sharp decline of $234 billion in the altcoin capitalization over the last weeks. This is one of the largest declines in recent memory, but it’s still less severe than either the 2021 miner migration crash in May or the 2022 LUNA collapse.
