Altcoin Seasonal Index drops to 35, confirming Bitcoin Seasonal dominance
The Altcoin Seasonal Index, a key indicator tracking altcoin performance relative to Bitcoin, has fallen 3 points to 35 as of Nov. 16, 2024, according to CoinMarketCap (CMC). The decline highlights the continued dominance of Bitcoin Seasonal as altcoins have struggled to keep up with Bitcoin’s performance over the past 90 days.
Understanding the Altcoin Seasonal Index
The Altcoin Seasonality Index measures whether the cryptocurrency market favors altcoins or Bitcoin based on their performance over the past 90 days.
Below 25: Indicates Bitcoin season, where Bitcoin outperforms most altcoins.
Above 75: signals an altcoin season, with at least 75% of the top 100 coins outperforming Bitcoin.
Between 25 and 75: reflects a mixed market with no clear dominance for either Bitcoin or altcoins.
The index currently has a score of 35, firmly signaling a Bitcoin season, meaning that less than 25% of the top 100 altcoins are outperforming Bitcoin.
Reasons for the index drop
The 3 percentage point drop in the Altcoin Seasonal Index highlights several ongoing market dynamics:
Bitcoin’s Strong Performance: Bitcoin continues to dominate market sentiment, attracting the majority of investor attention and capital. Its rising dominance leaves room for altcoins to outperform the broader market.
Lack of altcoin momentum: Compared to Bitcoin’s strong upward trajectory, many altcoins have seen weak price action or limited gains.
Investors Eye Bitcoin ETFs: Recent inflows into spot Bitcoin ETFs have concentrated funds on Bitcoin, further sidelining altcoins.
These factors have combined to maintain Bitcoin’s dominance in the market, strengthening its dominance over altcoins.
What this means for markets
The decline in the Altcoin Seasonal Index shows that Bitcoin remains the main focus for investors. Here is how this dynamic affects the crypto market:
Shift in investment strategies: Investors may prefer Bitcoin during Bitcoin season due to its stability and leadership, especially during times of market uncertainty.
Delayed altcoin rally: Altcoin rallies usually follow major moves in Bitcoin price. For now, altcoins may remain subdued until Bitcoin consolidates or slows down.
Strengthening Bitcoin Dominance: Bitcoin dominance, a measure of Bitcoin’s market share compared to the total cryptocurrency market capitalization, is likely to remain high, further solidifying Bitcoin’s position as the market leader.
Could altcoin season be around the corner?
For the market to enter altcoin season, the index needs to rise above 75. Here are the potential catalysts for such a shift:
Profit-taking on Bitcoin: If Bitcoin reaches a price plateau, investors may convert profits into altcoins, sparking a rally.
Positive altcoin developments: Major technological updates, partnerships, or regulatory clarity could reignite interest in specific altcoins, driving broader gains.
Declining Bitcoin Dominance: A decline in Bitcoin dominance is often associated with rising interest in altcoins, which could set the stage for an altcoin season.
Until these factors materialize, Bitcoin will likely maintain its market dominance.
Track indices to gain market insights
The Altcoin Seasonal Index is a valuable tool to understand market cycles and adjust strategies accordingly.
For Bitcoin season: Focus on Bitcoin as it generally outperforms altcoins.
For altcoin season: Diversify into the best performing altcoins as they generally offer higher returns during this phase.
Mixed Markets: Balance investments between Bitcoin and altcoins to gain benefits from both.
Staying informed about index movements can help investors navigate changing market conditions.
in conclusion
The drop in the Altcoin Seasonal Index to 35 highlights the continued dominance of Bitcoin Seasons, with altcoins continuing to underperform relative to Bitcoin. While the index signals a challenging environment for altcoins, it also reaffirms Bitcoin's position as the market's focal point. Investors should monitor Bitcoin's dominance and the Altcoin Seasonal Index for insights into potential market shifts.
