The traditional indicator of an altcoin season, characterized by capital flowing from Bitcoin to other cryptocurrencies, is no longer relevant. This conclusion was reached by Ki Young Ju, founder and CEO of CryptoQuant.
Alt season is no longer defined by asset rotation from #Bitcoin.
The surge in altcoin trading volume isn’t driven by $BTC pairs but by stablecoin and fiat pairs, reflecting real market growth rather than asset rotation.
Stablecoin liquidity better explains the altcoin markets. pic.twitter.com/riejM7oXyk
— Ki Young Ju (@ki_young_ju) December 2, 2024
According to him, the defining factor for the segment is trading volumes not in pairs with digital gold, but against fiat and stablecoins. The liquidity of the latter better reflects market growth.
In an earlier thread, the analyst explained that the current Bitcoin bull rally is overwhelmingly driven by demand from institutional investors and spot ETF issuers.
These market participants do not intend to exchange the leading cryptocurrency for other assets and mostly operate outside of crypto exchanges. This makes capital rotation from Bitcoin even more unlikely, as altcoins traditionally rely on trading platforms and require an influx of funds from new retail investors, noted the head of CryptoQuant.
“Don’t get me wrong, I am optimistic about altcoins. I just want to point out that only a select few will attract fresh capital. Alt season will come, but for a few. Not every coin will reach its previous high,” stated Ki Young Ju.
Senior analyst at Glassnode, known as CryptoVizArt, disagreed with his opinion, citing on-chain activity data.
I believe altseason has already begun and probably lose to its peak ! https://t.co/9TwNF9m4vJ
— CryptoVizArt.₿ | ZiCast ? (@CryptoVizArt) November 27, 2024
“I believe the altcoin season has already started, but it will likely fall short of its peak,” said the expert.
The founder of CryptoQuant acknowledged the statement as valid “for a few major coins.” He noted that the aggregate value of the segment is still far from its highs.
At the time of writing, the Altcoin Season Index from Blockchain Center stands at 73. This indicates that 73% of the top 50 cryptocurrencies by market capitalization have outperformed Bitcoin in returns over the past 90 days. The “alt phase” will occur when the index reaches 75.
In October, analysts at Hashkey Capital suggested that an altcoin rally would begin after Bitcoin surpasses $80,000. The flagship cryptocurrency crossed this level on November 10. In the same month, digital gold reached a new all-time high near $100,000.
According to crypto analyst and ITC Crypto founder Benjamin Cowen, altcoins are expected to undergo a deep correction before the growth season.