Altcoins show mixed performance as Bitcoin rallies, but analysts link the delay of altcoin season to BTC dominance and the influence of institutional capital.
In recent times, altcoins have experienced mixed price movements that largely contrasted with Bitcoin’s steady rally. For context, Bitcoin has surged by over 61% in the past three months, significantly outperforming many altcoins, some of which have gained less than 30% during the same period.
Specifically, assets like Tron (TRX) and Toncoin lagged behind Bitcoin’s performance, with TRX rising only 25% and Toncoin gaining just 15% in their 90-day trajectory.
However, certain altcoins have posted impressive rallies. Stellar (XLM) has increased 420% in the last three months, and Cardano (ADA) gained 142% during the same timeframe. This mixed performance among altcoins has sparked concerns among market participants.
Bitcoin Role in Altcoin Season
Notably, the delay in the anticipated altcoin season is attributed to changing dynamics in Bitcoin’s market participation. Ki Young Ju, CEO of CryptoQuant, highlighted a shift in the type of capital flowing into Bitcoin compared to previous market cycles.
Institutional investors and spot exchange-traded funds (ETFs) now dominate Bitcoin demand, deviating from the retail-driven capital flows of earlier bull runs.
Unlike crypto exchange users, these institutional entities rarely rotate their Bitcoin holdings into altcoins, impacting market liquidity.
Why is altcoin season delayed?
Compared to the last cycle, the nature of capital flowing into #Bitcoin has shifted. The current Bitcoin rally is primarily driven by demand from institutional investors and spot ETFs.
Unlike crypto exchange users, institutional investors and ETF… pic.twitter.com/dpDBCF0BTo
— Ki Young Ju (@ki_young_ju) November 27, 2024
Furthermore, Ju emphasized that altcoin market capitalization remains below its all-time high. He noted that a significant influx of fresh capital to crypto exchanges is essential for altcoins to achieve broader market growth.
The CEO added that future Bitcoin growth would likely depend on institutional participation, ETFs, and potentially governments, leaving retail-driven altcoin adoption reliant on independent strategies to attract fresh investment.
BTC.D Drop Could Trigger Altcoin Season
Market analysts have been scrutinizing historical patterns to predict the onset of altcoin season. TechDev, a crypto analyst, shared insights on Bitcoin dominance, focusing on its relationship with altcoin market performance.
According to his analysis, capital typically rotates into altcoins when Bitcoin’s dominance reaches a certain threshold—often measured by the 200-week simple moving average (SMA). Historically, this rotation occurred every four years, often leading to periods of macro decline in Bitcoin’s dominance.
Another prominent analyst, Rekt Capital, also has similar views on Bitcoin’s dominance. He pointed out that a recent retracement in Bitcoin’s dominance to 57.68% created an opportunity for altcoin growth.
If dominance continues to decline, marked by significant technical indicators, further opportunities for altcoin breakouts may arise. However, Rekt Capital also projected that Bitcoin would likely regain dominance following any major altcoin rally.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
