The anticipated altcoin season may require a bit more patience, but what is meant to come will come.
Author: Murphy, on-chain data analyst
On-chain data evaluation model - Altcoin Season
One day during class, Xiao Chi @FC_0X0 sent me a WeChat message saying: "There is a data point, which is the gap between the total inflow of stablecoins into exchanges and the dollar value of BTC withdrawn, that is, the remaining potential purchasing power may have a direct relationship with the volatility of altcoins. Can we look at the timing of altcoin launches through this logic?"
Coincidentally, my presentation also mentioned data observations regarding the potential conditions for 'capital overflow', which corresponded to the timing of certain large-cap altcoin launches. However, at that time, it was just a rough outline, and I vaguely thought of some previously overlooked areas...
After returning, I organized the data and, inspired by Xiao Chi’s thoughts, reimagined a set of visual indicators that can effectively determine the 'altcoin season'. Here I share my thoughts:
Altcoin Season Condition 1: Capital Overflow Condition Assessment

(Figure 1)
In Figure 1, the green indicates whether the total scale of stablecoins flowing into exchanges within 30 days is greater than the dollar value of BTC withdrawn from exchanges. If so, it means that these funds have the potential to overflow into altcoins in addition to buying BTC. The higher the green signal bars, the greater the theoretical overflow value, which indicates more favorable preconditions for the start of the altcoin season.
From the data, during the periods of 2023.10-2024.3 and 2024.11-2024.12, the theoretical overflow value is the highest, indicating a higher possibility of an 'altcoin season' occurring during these two periods. There is also a small window between August and September, but in terms of scale and duration, it is not as significant as the above two periods, thus having relatively weak influence.
Altcoin Season Condition 2: Capital Inflow of Mainstream Assets

(Figure 2)
Historically, BTC often leads the overall sentiment of the cryptocurrency market, followed by market confidence flowing into other large-cap mainstream coins, and finally tilting further toward altcoins. The tool to visualize this capital rotation uses the realized market cap of BTC and ETH along with the 30-day change in total supply of stablecoins (as shown in Figure 2). When all three major mainstream assets show net capital inflow, it is considered that market sentiment begins to heat up, and overall risk appetite increases, which is one of the macro necessary conditions to initiate the altcoin season.
From the data, during the periods of 2023.10-2024.8 and 2024.10-2024.12, all three major mainstream assets experienced net capital inflows simultaneously, peaking in March and December 2024. This also marks the most FOMO moment for market sentiment in the current cycle so far.
Altcoin Season Judgment 3: Positive Momentum of Altcoin Market Cap Dispersion

(Figure 3)
The third condition that needs to be met to judge the start of the altcoin season is to isolate positive momentum within the dispersion of total altcoin market cap. We need to find periods where the total valuation of the 7D SMA within altcoins is greater than that of the 30D SMA. This signifies that the valuation of altcoins is amplifying in the short term, and liquidity flowing into altcoins is rapidly increasing.
In Figure 3, the red line represents the 7D average, while the blue line represents the 30D average; from the data, during the periods of 2023.10-2024.4 and 2024.11-2024.12, the red line crosses above the blue line, indicating that liquidity in the crypto space is beginning to tilt towards altcoins, and the market cap of altcoins is entering a stage of positive momentum growth.
Summary
The above three conditions are considered from different perspectives: Condition 1 represents the possibility of capital overflow; Condition 2 represents overall sentiment and risk appetite; Condition 3 represents liquidity tilt. When all three are met, it is highly likely that the altcoin season is approaching.
Currently, Condition 2 is met, but Conditions 1 and 3 are not; this suggests that there is a basis for initiating the altcoin season, but liquidity is still concentrated in mainstream assets (especially BTC), and there hasn't been significant overflow of capital into altcoins.
However, we can also see that the 'negative overflow' in Condition 1 is slowly diminishing, which is a positive signal. Although friends may need to be a bit more patient for the anticipated altcoin season, what is meant to come will come.
The content shared in this article is for communication and research purposes only and should not be considered investment advice.

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