In September, Bitcoin [BTC] witnessed an impressive recovery, surging from $52.5K to $65K.
This recovery also had a positive impact on alternative cryptocurrencies (altcoins), with the Altcoin Season Index reaching levels last seen in July. Several altcoins experienced significant gains, particularly in the AI and memecoin sectors, during this rally.
Even though the Altcoin Season wasn’t at its peak, the Altcoin Season Index stood at 37, indicating potential for further growth.
Is Altseason on the Horizon?
Despite this, there were clear signs pointing towards a potentially exciting altcoin season ahead. For instance, Bitcoin dominance (BTC.D), which has been on the rise, encountered a critical hurdle at the 58% level.
A decline in BTC.D could suggest a period for altcoins to gain more momentum.
Another optimistic indicator came from the altcoin market cap, excluding Bitcoin and Ethereum. Henrik Zeberg, Swissblock’s Head Macro Economist, suggested that the Altcoin market was gearing up to reach a $3 trillion market cap.
“Based on the bull flag pattern and momentum indicators, we could see the Altcoin market heading towards a market capitalization of around $3 trillion.”
Presto Research also highlighted a potential shift, pointing to a surge in Ethereum (ETH) gas fees as a sign of increasing interest to capitalize on a potential upswing in altcoins. The research firm also noted that ETH had outperformed BTC following the recent changes by the Federal Reserve.
The company mentioned that certain investors might be ready to leverage the significant asymmetric risk profile, especially since many altcoins hit yearly lows due to recent challenges.
The ETHBTC ratio saw a recovery of nearly 10%, rising from 0.038 to 0.042 after the Fed’s rate adjustments. Although it has slightly retraced since then, this showcased ETH’s gains relative to BTC. As ETH serves as an indicator of the altcoin market’s strength, it indicated a substantial relief rally for altcoins.
Mark Thielsen from 10X Research also supported the notion of a positive trajectory for altcoins. He highlighted a notable transition by knowledgeable traders, particularly from Korea, shifting from BTC to altcoins.
“With Bitcoin surpassing $60,000 and aiming for $65,000, traders have been accumulating undervalued altcoins like TAO, ENA, SEI, APT, SUI, NEAR, and GRT.”