The traditional signal for the start of the altcoin season in the form of capital outflow from Bitcoin to other cryptocurrencies is no longer relevant. This conclusion was reached by the founder and CEO of CryptoQuant, Ki Yun Joo.
According to him, trading volumes against fiat and stablecoins, rather than against digital gold, are crucial for the segment. The liquidity of the latter better reflects market growth.
In an earlier thread, the analyst explained that the current bullish rally of Bitcoin is largely driven by demand from institutional investors and issuers of spot ETFs.
These categories of market participants do not intend to swap the first cryptocurrency for other assets and, moreover, for the most part operate outside of cryptocurrency exchanges. This makes capital rotation out of Bitcoin even less likely, as altcoins traditionally rely on trading platforms and need an influx of funds from new retail investors, noted the head of CryptoQuant.
"Don't get me wrong, I am optimistic about altcoins. I just want to note that only a select few will attract fresh capital. An altseason will come, but for a few. Not every coin will reach its previous peak," said Ki Yun Joo.
Senior analyst at Glassnode under the nickname CryptoVizArt disagreed with his opinion, citing on-chain activity data.
"I believe that the altcoin season has already begun, but it will likely fall short of its peak," the expert stated.
The founder of CryptoQuant acknowledged the statement as valid "for several major coins." He noted that the total value of the segment is still far from its highs.
At the time of writing, the Altcoin Season Index metric from Blockchain Center is at 73. This means that 73% of cryptocurrencies from the top 50 by market capitalization have outperformed Bitcoin in terms of returns over the last 90 days. The "alt phase" will begin when the index reaches a value of 75.
In October, analysts at Hashkey Capital suggested that the rally in altcoins would start after Bitcoin surpasses the $80,000 mark. The flagship crossed this level on November 10. In the same month, digital gold set a new all-time high near $100,000.
Recall that, according to crypto analyst and founder of ITC Crypto Benjamin Cowen, altcoins are expected to undergo a deep correction before the growth season.
