How far is the Altseason?

The Altseason, or Altcoins season, could be closer than expected. This shows the market behavior, which begins to pay greater attention to alternative cryptocurrencies to Bitcoin (BTC).

Currently, 50% of the top 50 of the main cryptocurrencies are showing A better performance than Bitcoin, according to the index developed by the firm Blockchain Center. Although this figure does not reach the 75% technical threshold that marks the official start of an Altseason Under this criterion, it represents a significant advance that reflects increasing signals within the market.

The concept of Altseason does not have a unique definition. In this case, it is considered to begin when three out of four Altcoins, within the 50 main per capitalization (excluding stablecoins and wrapped versions of BTC and Ether), exceed Bitcoin’s performance in the last 90 days. The index that measures this behavior has been used by multiple analysts as A key reference to anticipate the beginning of a bullish cycle Focused on cryptocurrencies other than Bitcoin.

In general, cryptocurrency market cycles are usually divided into four phases, as reported by cryptoics. The first is dominated by a strong capital entrance to Bitcoin, whose price reaches historical maximums. This already happened, with BTC, exceeding the USD 120,000 threshold.

In the second phase, once BTC stabilizes, investors move part of their capital to ETH, the cryptocurrency of the Ethereum network, in search of additional yields. This tends to reduce Bitcoin’s dominance in front of the rest of the market.

In the third phase, Ethereum begins to gain impulse and capital flows to high capitalization altcoins. It is at this time that enthusiasm around more diversified projects within the ecosystem increases.

Finally, the fourth phase is marked by a speculative wave: Investors turn to coins with less solid foundationsin the middle of a high euphoria environment. Although this stage can generate accelerated gains, it also implies high volatility and loss risk.

At the moment, the market is in phase two of the cycle. This is so since ETH is at a stellar moment, exceeding the USD 3,000 for the first time since this year already 25% of its historical maximum of USD 4,890, reached in November 2021. In addition, this cryptocurren reported cryptootics.

Therefore, analysts such as Eric Jackson of EMJ Capital estimate that ETH could reach USD 10,000 in the short term. Other projections, such as those of the analyst Gert Van Lagen are more ambitious, with objectives of USD 18,000 in this upward cycle.

Bitcoin still dominates the market

Now, although the market is in the second phase of the cycle and the Altseason begins to heat up, Bitcoin’s dominance is Ubica In 60.3%, while Ethereum represents 11.6%of the market and other cryptocurrencies concentrate 28.2%.

This means that more than half of the capital within the ecosystem remains concentrated in Bitcoin. Although, historically, The Altseasons have coincided with notable falls in the dominance of BTC. During the peaks of previous seasons of Altcoins, as in June 2017, January 2018 and December 2022, BTC’s participation in the market fell to 40%, as seen in the next graph of coinmarketcap.

For trader known as FDS, active in the TrainingView community, the market is at a turning point. According to their analysis, several indicators converge: BTC’s domain is found at technical reversion levels, the BTC/ETH PAR shows a trend of change, and the total capitalization of the cryptocurrency market is marking historical maximums. This combination of factors It suggests an imminent redistribution of capital towards alternative assets.

Market reading also includes institutional behavior indicators. According to analyst Axel Adler Jr., The monthly average flow of Altcoins exchange was 1.6 billion dollars to June 27below the annual average of 2.5 billion. This contraction is seen as a consolidation phase. In previous cycles, similar levels of low flow preceded sustained increases in the prices of the Altcoins, which reinforces the hypothesis of a new rebound.

Another relevant fact is the behavior of large cryptocurrency holders. According to an analysis of Cryptoquant collected by cryptootics, there have been massive and simultaneous withdrawals of Altcoins from Binance, the largest exchange in the world. This dynamic is usually interpreted as a sign of accumulation.

In addition, the big investors, also known as whales, tend to transfer their assets outside the platforms when they seek to keep them cold, with the intention of conserving them in the long term. When the offer available in the exchanges is reduced, the selling pressure decreases, which could favor a price increase if demand is maintained.

This set of signals suggests that the Altcoins market is winning traction. Although the technical threshold of 75% necessary to formally declare an Altseason, the foundations, the current historical patterns and the current metrics have not crossed a transition stage. If BTC dominance continues to descend and the technical conditions are consolidated, Capital flow could favor Altcoins more decisively in the coming weeks.