Is the altcoin season here? Analysts say the altcoin market is nearing a momentum bottom
Although signs of the imitation season are beginning to appear, it may still be too early to make a judgment.Author: Nancy Lubale
Compiled by: Deng Tong, Golden Finance
Cryptocurrency analysts indicate that the altcoin market has been on a downward trend for the past two weeks, but a key indicator suggests that the recent decline may signal a "relative momentum bottom," and if history repeats itself, a "coordinated lift-off" could occur soon.
Jamie Coutts, Chief Cryptocurrency Analyst at Real Vision, stated that the top 200 equal-weight cryptocurrency index "is still on a downward trend, but the altcoin season indicator shows that the recent drop of 10% is likely a relative momentum bottom."
The top 200 equal-weight cryptocurrency index is an equal-weight index designed to track the performance of the top 200 cryptocurrencies by market capitalization relative to Bitcoin.
Coutts shared the chart below, showing that the index has been on a downward trend, with the altcoin season indicator reaching a low of 10%. This means that "only 10% of the top 200 have outperformed BTC in the 90-day review," the analyst explained.
Historically, this marks a market bottom, after which altcoins tend to rise continuously.
"Before we see a coordinated lift-off, altcoins may still fluctuate around these levels for a while, as many altcoins have begun to establish a solid foundation."
Top 200 Equal-Weight Cryptocurrency Index vs. Daily Active Users vs. Altcoin Season Indicator. Source: Jamie Coutts
Coutts also considered another indicator in the entire cryptocurrency market—the number of Daily Active Users (DAU)—to support his predictions for the altcoin market's direction.
DAU is a metric that reflects the number of unique public addresses that transact on the blockchain each day.
Coutts pointed out that so far this year, the DAU across all blockchains has grown by 97%, indicating that "the growth momentum remains strong."
He stated that more users mean more user fees, which translates to "rising asset prices."
Renowned cryptocurrency analyst Moustache mentioned in an article on July 15, "I believe some altcoins are ready for the second round," adding that the highly anticipated launch of a spot Ethereum ETF could provide the necessary momentum.
In a previous article, Moustache shared the following chart, showing that the market capitalization of altcoins is repeating a pattern similar to 2020 before starting "the strongest wave of the bull market."
Source: Moustache
It’s Still Bitcoin Season
The Bitcoin dominance chart (which measures BTC's market share relative to the entire cryptocurrency market) is one of the commonly used indicators to determine whether altcoin season has begun. It can provide traders with insights into overall investor sentiment and risk appetite in the market.
This indicator has been on an upward trend since the beginning of 2024, reaching a three-year high of 56.5% on April 13. As of the publication of this article, BTC dominance stands at 54%, indicating that it is still Bitcoin season.
Bitcoin Market Dominance. Source: TradingView
This means that the performance of altcoins is still lagging behind Bitcoin.
According to data from Blockchain Center, only 37% of the top 50 altcoins have outperformed BTC in the past three months. While this is a positive sign, it is still insufficient to declare the arrival of altcoin season. To announce the onset of altcoin season, this percentage must exceed 75%.
Altcoin Season Index. Source: Blockchain Center
This indicates that, although signs of altcoin season are beginning to converge, it may still be too early to make a judgment.
