Will Ethereum ETFs spark altcoin season?
The altcoin market could see a turning point this week as the U.S. spot Ethereum [ETH] ETF begins trading. As the largest altcoin, ETH’s performance could set the stage for the altcoin industry.
However, altcoin season could lag behind due to a possible surge in Bitcoin (BTC) dominance ahead of a possible Fed rate cut in September. Current BTC dominance reflects a pattern from 2019, two months before the Fed cut rates, while altcoins failed to catch up.
This could be bad news for crypto investors who were expecting relief from altcoin markets that plunged sharply in June.
In addition, the Altcoin Seasonality Index indicator shows that altcoin season is not here yet. According to the indicator, the first half of 2024 is a high season for Bitcoin. If Cowen’s prediction is correct, this pattern could continue.
However, BTC dominance is only one way to measure altcoin season. Another way is the ETH/BTC ratio. ETH/BTC tracks the performance of ETH relative to BTC. If the US spot ETH ETF starts trading, the ratio is expected to soar and trigger an altcoin season.
How ETH/BTC will react and whether it will trigger an altcoin season remains to be seen. Therefore, BTC dominance and the ETH/BTC ratio are key aspects to track and measure the possible impact on altcoins.
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