Altcoins saw significant growth this week, accompanied by a surge in Bitcoin [BTC]. These gains pushed the Altcoin Season Index to a two-month high of 45, according to information from Blockchain Center.
However, the index needs to surpass 75 for Altcoin Season to be confirmed. While this has not happened yet, the index has been trending upwards, considering that at the beginning of the month, its value was only at 18.
This data shows that the sentiment towards altcoins is turning positive, but for the index to surpass 75, altcoins need to continue to extend their bullish momentum.
Altcoin performance vs Bitcoin
Ethereum [ETH], the largest altcoin, is underperforming Bitcoin as the ETH/BTC ratio recently dropped to its lowest level since 2021.
The ratio has recovered to above 0.04 at press time, indicating that ETH has seen some growth against Bitcoin. However, it remains at its lowest level of the year.
Ethereumâs biggest rival, Solana [SOL], is the only altcoin among the top ten that has outperformed BTC over the past seven days with a 12% gain.
Looking at the performance of the top 50 altcoins over the past 90 days also shows that the majority of altcoins remain in a bearish state, with the best performers being AAVE [AAVE] and SUI [SUI], up over 50%.
This shows that altcoins need to extend their bullish momentum for the market to enter an Altcoin Season.
Could the DeFi and NFT Boom Usher in Altcoin Season?
The DeFi (DeFi) and Non-Fungible Token (NFT) sectors play a major role in influencing altcoin performance. Both sectors have seen significant growth over the past week.
According to DeFiLlama, the Total Connected Value (TVL) of the entire DeFi industry has increased by more than $10 billion in the past two weeks, reaching $85 billion at press time.
However, there is still plenty of room to grow as DeFi activity remains below this year's high of above $100 billion.
The NFT space has also seen growth as NFT sales have increased by more than 40% at press time, according to information from CryptoSlam.
While these factors are building the case for an Altcoin Season, Bitcoin Dominance remains high. Currently, Bitcoin controls 54% of the cryptocurrency market according to Coinstats.
The increase in BTC dominance can be attributed to Ether's poor performance, as the largest altcoin's dominance rate has dropped from 18% at the start of 2024 to 14% at press time.
