Here are 6 signs pointing to a new alt season, and 4 reasons why it might never happen again!
First of all, what is an alt season?
I initially searched for a purely mathematical definition and found an interesting one: Alt season = 75% of the top 50 coins (by market cap) outperform Bitcoin over a 90-day period.
This makes it measurable with a percentage, which is currently at 45%.
The first real alt season we experienced was in 2021, and it was wild—90% of the top 100 coins significantly outperformed Bitcoin over an extended period.
Will it happen again?
Let’s look at 6 optimistic indicators and 4 pessimistic ones.
Optimistic 1: Favorable Economic Conditions
A macroeconomic environment that benefits cryptocurrencies:
• The FED lowering interest rates
• China injecting liquidity into the markets
• The upcoming U.S. presidential election in November, which could give a positive signal to the crypto market
Optimistic 2: Bitcoin Dominance
Historically, alt seasons began when Bitcoin dominance significantly dropped.
This simply means BTC liquidity flows into alts.
Bitcoin dominance has been rising since 2022 and seems to have peaked, suggesting it may soon decline.
Optimistic 3: ETF Approvals
The approval of ETH and BTC ETFs has started a race, with major altcoins hoping to launch their own ETFs to capture institutional market liquidity.
While it’s uncertain, altcoin ETFs could potentially trigger a new alt season.
Optimistic 4: Returns
Bitcoin has been one of the best-performing assets this year, leaving no reason to sell it.
However, if BTC’s performance slows down, investors might sell Bitcoin to seek higher returns in altcoins, potentially sparking an alt season.
Optimistic 5: Technical Indicators
The RSI signals a bottom momentum, suggesting oversold conditions in altcoins.
The Broadening Wedge pattern indicates we might be at the end of a weakness phase for altcoins. These signals are significant because traders often follow them.
Optimistic 6: Stablecoin Accumulation
There’s a growing accumulation of stablecoins, meaning this liquidity could be reinjected into alts at any moment, kickstarting an alt season.
The total market cap of stablecoins has never been higher.
Pessimistic 1: Retail Investors Aren’t Here
We’ve always seen alt seasons accompanied by euphoria and a surge of retail users entering the market.
One way to gauge this is by checking Google search trends for “Bitcoin” or “crypto.”
We are far from the levels seen in 2021.
Pessimistic 2: Market Fragmentation
There have never been as many crypto projects, leading to market fragmentation.
During the last bull run, the total market cap reached $3T, causing massive excitement.
Today, the total market cap is close ($2.4T), yet we’re far from that level of enthusiasm. This indicates significant dilution.
Pessimistic 3: Retail Investor Distrust
One might think retail investors will return, but many who entered in 2021 lost money.
They likely had a bad experience with the ecosystem and might be reluctant to come back.
Pessimistic 4: Many Projects Waiting to Launch
Many projects haven’t launched their tokens in 2024, waiting for better market conditions.
While this makes sense, we could see massive dilution if the market improves as many projects launch their tokens simultaneously.
It’s very difficult to say whether there will be an alt season or not.
As you can see, there are indicators both for and against it.
Personally, I’m becoming more pessimistic about the chances of an alt season. But make up your own mind!
