After the Bitcoin climb, the appetite for the risk between investors is triggered.
Altcoins usually give greater profits (and also greater losses) than Bitcoin.
Cryptocurrencies could be about to take off. The statement is not an expression of desire, but a conclusion that has livelihood in this bullish signal: there are great Bitcoin (BTC) transfers to exchanges.
This movement usually anticipates Bitcoin investor money rotation towards lower market capitalization assets.
To better understand what is happening, it is necessary to review the recent figures. According to Cryptoquant data, an analysis firm ON-CHAINBTC has registered its Greater money entry to exchange platforms since July 2024.
The following are observed the inputs (green line) and exits (red) to exchanges and the evolution of the price of BTC (white line):
For firm analysts, “these types of movements usually indicate a greater distribution and profits, since more BTC are available for negotiation.” In other words, great investors would be sending their bitcoin to exchanges with the intention of selling.
In addition, they warn: “Historically, similar peaks in tickets to Exchange have preceded deeper corrections. This week’s data suggests that important players – positive funds or institutions – are selling BTC near their historical maximums to manage their risk exposure.”
When investors transfer their BTC to Exchange, it is usually with the intention of selling. This increases the offer available in the market and, consequently, can generate greater selling pressure on the price. However, It does not imply a bearish pressure for the market in general.
For this reason, specialists clarify that “this capital rotation could also boost an Altcoins rally, since demand moves to alternative assets.”
As cryptootics has reported, the market rotation cycle occurs when investor money flows from BTC to Ethher (eth), the native currency of Ethereum, and other cryptocurrencies of lower market capitalization.
To understand the rotation cycle route, it is convenient to separate it into four phases:
- 1- Capital enters BTC: This phase is characterized by a growing demand for the currency created by Satoshi Nakamoto, which takes its price to new historical maximums.
- 2- The second cryptocurrency attracts investors: Once Bitcoin stabilizes higher prices, greedy traders begin to look for additional yields, moving capital to the most capitalization asset, which is currently ETH. That is why in this phase a reduction in the domain of Bitcoin begins to be seen in the total capitalization of cryptoactive.
- 3- Other lower capitalization cryptocurrencies rise: When ETH charges impulse, capital extends to other assets, as part of an expansion of enthusiasm. It is then that an Altseason tends to form.
- 4- Euphoria in the market: The speculative demand in the general cryptocurrency market is triggered, which makes even some unknown or new register parabolic price increases. It is the phase that records the highest profits, but also that it can lead to greater losses later, because there are no fundamentals that support the rise.
Given this rotation cycle, Cryptoquant specialists highlight: “As the offer increases in exchanges, market volatility could be intensified, especially before demand rebounds. Traders should closely follow this indicator, since it could anticipate the next great movement.”
What is missing for the Altseason?
According to the definition of the site Blockchaincenterthere is an altseason when 75% of the 50 main currencies (excluding the stablechins and wrapped tokens of BTC or ETH) achieve a better performance than Bitcoin In the last 3 months.
At present, 57% of cryptocurrencies have exceeded bitcoin’s performance in the last 90 days:
It is important to keep in mind that this cycle does not always follow a pre -established or secured sequence. Is that once capital moves from Bitcoin to other assets, The market can enter a pause phase or even see a return of funds to BTC.
In addition, the Altseason does not necessarily develop in a linear or sustained way: it could be reactivated later in the year if the economic conditions, the regulatory environment or simply the mood of the market.
A trigger would be an escalation in the conflict within the framework of the “war of tariffs” that the president of the United States Donald Trump has unleashed. The deadline is next August 1 and, if the suspension of tariffs to imports from China, European Union, Mexico, among others, could resurface commercial tensions.
A scenario of macroeconomic uncertainty It will be very unfavorable for risk assetssuch as actions and cryptocurrencies. In times of economic instability and geopolitical tensions, investors seek refuge in safer instruments, such as treasure bonds, which generate less profits but are not exposed to market volatility.
