TLDR
- Analysts suggest the altcoin market may be near a “momentum bottom”
- The crypto Top 200 Equal Weight Index shows a downward trend, but the Altseason indicator hints at a potential recovery
- Daily active user (DAU) count across blockchains is up 97% year-to-date
- Bitcoin dominance remains high at 54%, indicating it’s still “Bitcoin season”
- Ethereum’s performance against Bitcoin could signal the start of an altseason
As Bitcoin continues to dominate the cryptocurrency market, analysts are pointing to signs that an “altseason” – a period when alternative cryptocurrencies outperform Bitcoin – may be on the horizon.
Despite recent downward trends in altcoin prices, key indicators suggest that the market may be nearing a “momentum bottom,” potentially setting the stage for a significant rally.
Jamie Coutts, Chief Crypto Analyst at Real Vision, highlighted the crypto Top 200 Equal Weight Index, which tracks the performance of the top 200 cryptocurrencies by market capitalization relative to Bitcoin.
While this index has been trending downward, the Altseason Indicator recently hit a low of 10%, meaning only 10% of the top 200 cryptocurrencies were outperforming Bitcoin over a 90-day period. Historically, such lows have preceded sustained rallies in altcoins.
“Altcoins could still bounce around these levels for a while before we see a concerted take-off, many have started to build decent bases,” Coutts noted.
He also pointed to the daily active user (DAU) count across all blockchains, which is up 97% year-to-date, as a positive sign for the broader crypto market. More users typically translate to higher asset prices due to increased user fees.
Another popular crypto analyst, known as Moustache, shared charts suggesting that the altcoin market cap is repeating a similar setup to 2020, just before altcoins embarked on “their strongest wave in the bull run.” Moustache believes some altcoins are ready for “round 2,” with the potential launch of spot Ethereum ETFs providing additional momentum.
Bitcoin’s market dominance remains high at 54%, indicating that it’s still “Bitcoin season.” The Bitcoin dominance chart, which measures Bitcoin’s market share relative to the overall crypto market, has been on an upward trend since the beginning of 2024, reaching a three-year high of 56.5% in April.
For an official altseason to be declared, typically 75% of the top 50 altcoins need to outperform Bitcoin over a three-month period. Currently, only 37% have achieved this benchmark, according to data from Blockchain Center. This suggests that while signs of an altseason are emerging, it might be too early to make a definitive call.
One key cryptocurrency to watch in this potential transition is Ethereum. The ETH/BTC ratio, which compares Ethereum’s price to Bitcoin’s, is showing interesting long-term patterns.
While short-term weakness is possible, the long-term chart suggests Ethereum may be nearing the end of a falling wedge pattern that began in late 2022. A breakout above resistance could signal the start of a stronger altcoin market.
Analysts note that for a true altseason to begin, the ETH/BTC ratio would need to maintain a strong ascending trend and eventually surge above 0.085 to 0.09 BTC. Such a move could trigger a broader altcoin rally.
