Are we close to a new wave of growth?
According to a report from BlockBeats, an analysis of on-chain data suggests potential indicators of the start of an “altcoin season.” But what exactly does this mean?
In this report, we will explore the three critical conditions for the emergence of an altcoin season:
1. Capital Overload: When the total flow of stablecoins entering exchanges exceeds the dollar value of BTC withdrawn.
2. Market Sentiment*: Historically, BTC leads market sentiment, followed by large-cap altcoins.
3. Liquidity Shift*: The positive momentum in the dispersion of altcoin market cap.
Which shows that from October 2023 to April 2024 and from November to December 2024, there was a shift towards positive momentum in altcoin market cap. However, only the second condition is met, suggesting that while there is a basis for an altcoin season, liquidity remains concentrated in mainstream assets, particularly BTC.
These three conditions—capital bloat, market sentiment, and liquidity shift—are critical for the emergence of an altcoin season. Although only the second condition is met, the reduction in negative bloat in the first condition is a positive sign, indicating that an altcoin season may still be on the horizon, albeit one that requires patience.