The ‘Altcoin era’ is no longer led by the Bitcoin revolution – analyst
The cryptocurrency market may be on the brink of the highly anticipated altcoin season (altseason), much to the delight of speculative traders, but the determining factors have changed, according to a market analyst.
“Stablecoin liquidity” to determine the next altseason.
The crypto market is changing, with cyclical indicators, market structures and trading patterns changing rapidly.
“Altseason is no longer defined by asset rotation,” said CryptoQuant CEO Ki Young Ju in a December 2nd post.
As capital turns from Bitcoin (BTC) to altcoins, the traditional sign that the altcoin era has begun is outdated. Instead, altcoin trading volume is more spread across stablecoin and fiat currency pairs.
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For example, Bitcoin pairs combined altcoin trading volume has remained very low over the past few weeks despite the rise in the price of Ether (ETH). Moreover, several altcoins such as XRP (XRP) and Solana (SOL) are near their all-time highs, while the price of Bitcoin is consolidating below $100,000.
Meanwhile, the bottom right chart shows an increase in stable altcoin trading volume for stable altcoin pairs, which has increased in line with ETH price growth.
This reflects “real market growth rather than wealth circulation,” Kee said.
Total altcoin trading volume for BTC and stablecoin trading pairs. Source: CryptoQuant
This shift represents a deeper, more sustainable evolution in the crypto market, driven by Statcoins' increased liquidity and stability.
“Stablecoin liquidity better explains altcoin markets.”
Key added that the nature of capital flows into Bitcoin has changed compared to previous market cycles. Rather than the retail-driven capital inflows of previous bull cycles, the current bull market is primarily driven by institutional capital inflows into the spot Bitcoin Exchange-Treaded Funds (ETFs).
Source: Ki Young Ju
Meanwhile, the capitalization of all cryptocurrencies, excluding BTC, remains below all-time highs, which has reduced fresh liquidity from new currency users.
“Altcoins demand massive fresh capital influx into crypto exchanges to reach new all-time high market capitalization.”
Altseason is near.
The performance of altcoins seems to coincide with the improvement of the altcoin season index, indicating that the altcoin season is near. With this index at Blockchain Center:
“If 75% of the top 50 coins have outperformed Bitcoin over the past season (90 days), then this is Altcoin season.”
Altcoin period index. Source: Blockchain Center
This indicator actually shows that 73 percent of the top 50 altcoins have outperformed Bitcoin over the past 90 days. As this index has risen sharply in the past few days, it is approaching the 75% threshold.
As multiple top cryptocurrencies challenge new highs, market participants should look to calm coin liquidity and Bitcoin's dominant index, signaling the start of the altcoin season in the next few days.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
