The crypto community is ardently waiting for the clock to strike ‘altcoin season’; however, against the whims and fancies of the crypto community, the Altcoin Season Index (ASI), which was at 55 last week, has fallen more towards the Bitcoin season. The ASI is an indicator that measures the performance of the altcoins against Bitcoin. When the ASI value is less than 25, it is Bitcoin season, and when it is greater than 75, it is altcoin season. Any value between 25 and 75 on the ASI is considered neutral.
In the meantime the Bitcoin dominance has dropped to 59% from last week’s 60%, which shows that Bitcoin is slowing but surely losing hold of the market. Unlike the ASI which measure how many altcoins have outperformed Bitcoin over the past 90 days, the Bitcoin dominance shows the market share. The market cap of Bitcoin against the market cap of all the other altcoins put together.
Bitcoin still dominates the market and outperforms altcoins
So the bottom line that we could conclude based on the ASI and the Bitcoin dominance is that although Bitcoin has outperformed many altcoins and since many are likely investing in Bitcoin, the market cap or the Bitcoin dominance is still on the rise. Since Bitcoin dominance is on the rise the altcoin season might be delayed. This is because, when the altcoin season starts, traders will invest in altcoins more than in Bitcoin and as such the market cap of altcoins will be higher compared to BTC and thereby the BTC dominance will drop.
So why is the altcoin season being delayed?
Smart money is currently on stage for Bitcoin
On Crypto Quant analytics platform, an analyst by the name Burakkesmeci, “This time, the source of the Bitcoin rally is not retail — the big players are in the driver’s seat.” Driving his point home, the analyst stated that this is not a ‘retail investor frenzy’. “Since early 2023, retail investors have been selling BTC. Charts show a consistent decline in holdings by this group.” As a matter of fact the retail accumulation on the chart had gone into the negative zone. And in contrast to decline in retail accumulation, the institutional investors have been accumulating.
From another perspective, the analyst speculated the Google trends and stated, “Searches for “Bitcoin” are not at their lowest in the past 5 years, but they are still quite muted” As such he stated, there is no retail FOMO (Fear of Missing Out) and doesn’t show any characteristic like the 2021 cycle.
ETH strengthens against Bitcoin
Here’s another example to state that the Bitcoin dominance and the altcoins season delay is something that is fabricated and not part of the market cycle.
When comparing Ethereum against Bitcoin, the underdog has been strengthen against the top coin. If Bitcoin is actually performing well, it will be performing better than ETH. However, ETH is also being accumulated by large institutions, as such, when the accumulation of BTC and ETH is compared, then ETH trumps BTC. So why are institutions accumulating ETH more than BTC, isn’t it because they anticipate, an altcoin season?
ETH strengthening against its superior is a classic sign of an upcoming altcoin season. On the chart, the regression trend shows a pattern which was similar to the 2021 altcoin season. When the altcoin season fully flares up the ETH/BTC pair could reach 0.046 shortly.
