Strong Bitcoin ETF inflows could trigger the next leg of price increases.
Altcoins may follow BTC higher, but may find it difficult to overtake the king in the short term.
Bitcoin [BTC] may soon break out of its doldrums. At $677,000 at the start of the week, the lack of volume and speculative interest suggests BTC is not ready for a strong uptrend.
That has started to change over the past 24 hours, with data from Farside Investors showing that Bitcoin exchange-traded funds saw inflows of $886 million on Tuesday, June 4.
This level of buying could spark change and prompt speculators and investors to take action.
Will the increased attention on Bitcoin lead to a surge in altcoin prices? Or will the altcoin season have to wait? Here are the findings of the altcoin season indicator.
How long are we until altcoin season?
According to data from BlockchainCentre, the Altcoin Seasonality Index shows a reading of 31. The index has fallen from 80 to 31 over the past six months.
A year ago, the index showed a strong BTC season.
However, that was during the height of the bear market, when Bitcoin was trading at $25,000 and altcoins were in a long-term downtrend or consolidation phase.
At press time, while altcoins may be performing well due to the bullish enthusiasm for Bitcoin, only a few altcoins are likely to outperform Bitcoin.
If the Altcoin Seasonality Indicator can climb above 75, it would be a sign of insane bullishness for the entire altcoin ecosystem.
Given that there are far more altcoins currently than in previous cycles, gains during the altcoin season may still be concentrated in a few altcoins rather than a market-wide rally.
Bitcoin’s range-bound movement and similarities to the past
The Bitcoin dominance chart shows BTC’s market cap as a percentage of the total cryptocurrency market cap. Since April, the metric has been ranging between 53.9% and 56.3%.
At press time, the pair has rebounded from its range lows. The rise in BTC.D means that BTC is growing faster than other market currencies including Ethereum [ETH].
BTC’s dominance fell from 72% to 40.4% between January and June 2021. During this period, the altcoin market cap (excluding ETH) expanded from $122 billion to $934 billion.
Therefore, a strong downtrend in the BTC.D chart is necessary for the start of a real altcoin season.
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