Altcoins have experienced notable growth in recent days, in tandem with Bitcoin [BTC]. This upsurge has propelled the Altcoin Season Index to a two-month peak of 45, according to data from Blockchain Center.
Although the index must surpass 75 to confirm an altcoin season, the gradual increase from its starting position of 18 at the beginning of the month indicates a positive shift in sentiment towards altcoins.
Analysis reveals that for this index to breach the 75 mark, altcoins must continue their upward trajectory.
Comparative Altcoin Performance with Bitcoin
Ethereum [ETH], the dominant altcoin, has shown weaker performance against Bitcoin, with the ETH/BTC ratio dropping to its lowest level since 2021.
The ratio has since rebounded above 0.04 at present, signaling a slight gain for ETH against Bitcoin, albeit still lingering at yearly lows.
Among the top ten coins, Solana [SOL] emerged as the sole altcoin that outperformed BTC, making a 12% gain in the past week.
Reviewing the performance of the top 50 altcoins over the last 90 days, most are still in the negative zone. Notably, AAVE and SUI have emerged as the top gainers, each surging by over 50%.
These trends underscore the necessity for sustained altcoin growth to kickstart an altcoin season.
Could the DeFi and NFT Boom Propel the Altcoin Season?
The surge in decentralized finance (DeFi) and non-fungible tokens (NFTs) sectors significantly impacts altcoin performance, with both experiencing substantial expansion recently.
DeFiLlama data indicates a $10 billion uptick in Total Value Locked (TVL) across the DeFi industry within two weeks, reaching $85 billion presently.
Despite this growth, there is room for further expansion as DeFi activity remains below the peak levels exceeding $100 billion seen earlier this year.
NFT sales volumes have also surged by over 40% amid this growth, as reported by CryptoSlam.
While these factors bolster the case for an altcoin season, Bitcoin’s dominance remains solid, controlling 54% of the cryptocurrency market as per Coinstats data.
The increase in BTC’s dominance may be linked to Ether’s underperformance, with the largest altcoin’s dominance declining from 18% in early 2024 to 14% currently.