As of now, the anticipated altcoin season has yet to commence. Recent data from the altcoin season index indicates a diminishing likelihood of its arrival in the near future.
The market conditions have not been conducive for altcoins, with even Bitcoin [BTC] facing challenges in establishing a sustained upward trend in the past few weeks.
The last occurrences where the altcoin season index exceeded 75 were in January and December 2024. This index monitors the performance of the top 50 cryptocurrencies (excluding stablecoins) and their performance against BTC over a 90-day period.
Within the past 48 hours, the altcoin scenario took a negative turn. The emergence of the Official Trump [TRUMP] memecoin seemed to drain liquidity from the market, swiftly accumulating a market cap of almost $19 billion within a day of its launch.
Despite experiencing a 34% decline in value recently, the fully diluted value (FDV) remained at $58 billion, with only 20% of the total supply currently in circulation.
The rapid profits enticed altcoin holders to divest some of their assets in order to participate in the new trend. While this may draw more attention to the crypto market, it could also create a perception of the entire sector resembling a get-rich-quick scheme.
Possibility of an extended altcoin season in Q1 2025
The Bitcoin Dominance chart illustrates the share of BTC in the overall crypto market capitalization expressed as a percentage. An increase in BTC.D signifies that BTC is outperforming the altcoins in terms of market cap gains, while a decreasing trend implies that altcoins are dominating the market.
In November, BTC.D underwent a sharp decline from slightly above 60.5%. It dropped to 55% before reversing course and climbing in December and January.
Nevertheless, the recent upward trend encountered a significant resistance level near the 60% threshold. Consequently, a potential BTC.D reversal from 60.5%, coupled with increasing altcoin prices, leading to an extended altcoin season, could materialize in the upcoming months.
The altcoin market capitalization (excluding BTC and ETH) has exhibited a range-bound behavior since December. The TRUMP launch triggered a rejection of TOTAL3 from the range’s upper limits.
Prior to the current moment, BTC’s 6.8% surge from $101.3k to $108.2k prompted altcoins to register gains as well.
A breakthrough by TOTAL3 above the existing range ceiling and a decline in BTC.D would serve as indicators pointing towards the initiation of an extended altcoin season.
Until such signals arise, investors must uphold their faith in the market. Conducting thorough research into the held tokens can further fortify this conviction.