Cryptocurrency analytics firm Alphractal has released a comprehensive report analyzing the current state of the altcoin market over the past two years, raising the intriguing question of whether we are entering a new cycle. The firm points to data from these past two years, which reveal the emergence of “Micro Altcoin Seasons,” short periods where certain altcoins dominate the market relative to Bitcoin. This shift stands in stark contrast to the significant rise during the 2017-2022 cycle, where altcoins generally surged, significantly weakening Bitcoin’s role.
The 90-day fluctuation in Bitcoin’s dominance suggests that we have experienced multiple Micro Altcoin Seasons since 2023, a trend that has not been seen before. Bitcoin Dominance, which currently stands at over 63%, sees an increase when stable coins like USDT and USDC are included, bringing the total dominance to 72.52%. Alphractal highlights how the current market structure is different from past cycles, as seen in the long-term trends of altcoins.
Nevertheless, the report observes a positive trend for altcoin investors: as Bitcoin dominance increases, the potential for risk-adjusting altcoins becomes more appealing. According to the Altcoin Seasonality Index, some altcoins have recently fallen less than Bitcoin, signaling that accumulation may already be underway. Alphractal cautions that, while this投票 may not be universally bullish, a lack of price support in popular altcoins like SOL, XRP, AAVE, and BNB during the early 2024 quarter could lead to a potential sharp decline if Bitcoin continues to weaken.
However, Alphractal also points out that many lesser-known altcoins remain close to their launch or bearish prices, further fueling skepticism about a potential rally. But the firm caution notes that altcoin seasons can occur in both bull and bear markets, especially when supported by the right metrics. While investors should not dismiss the possibility, they should also be aware that not all altcoins will perform well. This is not investment advice.
