Market analysts are buzzing with excitement as the anticipated altcoin season appears to be underway, with Ethereum’s [ETH] price rally leading the way. The positive momentum in the altcoin sector is seen as a sign of a potential altcoin season.
Traders and analysts are closely monitoring the performance of ETH, as it is considered a key indicator of the overall health of the altcoin market.
Jake Ostrovskis, a trader specializing in options and Over The Counter (OTC) trades at market maker Wintermute, highlighted the growing optimism surrounding ETH as a driving force for the shift of capital towards altcoins.
“Is this bullish sentiment different this time? The market seems to think so. With ATM volatility soaring, skew reaching 12-month highs, and strong bidding in the wings (10d).”
The surge in implied volatility indicates that options traders are bullish on the future prospects of ETH, which could potentially boost the entire altcoin market.
Current Status of Altcoin Season
Nicholas Merten from DataDash shared a similar view on YouTube, pointing to the declining Bitcoin dominance (BTC.D) as a signal for a possible uptrend in altcoins.
Merten also noted that the Altcoin Season Index, excluding the top 10 tokens, had surpassed crucial levels and was trading above the 200-day moving average, suggesting a stronger momentum in the altcoin market with potential for further growth.
Despite these positive signs, the Blockchain Center’s Altcoin Season Index indicates that a full-fledged altcoin season has yet to materialize, with only around half of the top 50 tokens, such as Stellar [XLM] and Dogecoin [DOGE], outperforming Bitcoin in the last three months.
To officially declare an altcoin season, more than 75% of the top tokens would need to outperform Bitcoin.
While there have been spikes in altcoin momentum in the past, notably in July and September, they were short-lived as Bitcoin’s dominance increased. The sustainability of the current momentum remains uncertain.
On November 25th, Ethereum, Layer 2 solutions, GameFi, and DeFi sectors recorded double-digit gains while Bitcoin slid below $95,000.
However, the founders of Glassnode warned that a significant altcoin rally would only occur if Bitcoin surpassed $100,000 and saw a decline in market dominance. They stated,
“For a full-blown Altcoin season, we need Bitcoin’s dominance to weaken. Keep an eye on $100,000 —though a market shakeout could precede it!”
From the perspective of ETH/BTC, the outlook appears cautiously positive. A rise in the ETH/BTC ratio indicates Ethereum outperforming Bitcoin, which is generally favorable for altcoins.
Despite some optimism, Ostrovskis from Wintermute expressed caution, stating that the ETHBTC trend was not yet strong enough to sustain a robust altcoin season as of the latest data. He remarked,
“For a full-fledged ‘alt season’, #ETHBTC needs to show consistent strength over several trading sessions. Previous rallies in 2024 have been short-lived, underscoring the importance of this trend heading into year-end.”