- The Altcoin Season Index registered 60, signaling strength in altcoins versus Bitcoin.
- Bitcoin’s rally is driven by institutional demand, limiting fresh liquidity for altcoins.
- Altcoins need independent strategies and real-world utility to attract new capital.
The Altcoin Season Index, tracked by CoinMarketCap, hit 60 on November 28. While slightly lower than the previous day’s 61, the market remains firmly in altcoin season, where the top 100 coins outperform Bitcoin overall. However, the current Bitcoin rally, fueled by institutional demand and ETFs, may reduce liquidity for smaller altcoins, making it harder for them to reach new highs.
Market analysts say the altcoin season continues if 75% of these assets outperform Bitcoin over the past 90 days. This metric excludes stablecoins and wrapped tokens, providing a clearer picture of overall market dynamics. Updated daily by CoinMarketCap (CMC), the Altcoin Season Index shows the shifting relationship between Bitcoin and altcoins. This trend often signals a change in market cycles, as retail investors turn their attention to alternative tokens.
Currently, the Altcoin Market Cap has broken out of an ascending triangle pattern, signaling a potential bull run. Experts predict that the full force of an altcoin season will kick off in December 2024 and March 2025.
Factors Influencing Altcoin Performance
On one hand, experts believe altcoins are gaining strength, others suggest the Bitcoin rally, driven by institutions and ETFs, may limit liquidity for minor altcoins, hindering their rise.
In a November 27 post, CryptoQuant lead researcher Ki Young Ju discussed the flow of Bitcoin capital and its effect on the altcoin market. He explained that while institutions might invest in major altcoins through ETFs, they rarely buy minor altcoins, which still depend on retail traders. This poses challenges for smaller projects that rely only on exchange activity.
According to Ju, altcoins can reach new highs only with fresh capital entering crypto exchanges. He stated that altcoins must focus on developing real-world uses to attract new capital independently, rather than simply following Bitcoin’s momentum. The growth of trends like Decentralized Physical Infrastructure Networks (DePIN) could mark a strategic shift in this direction.
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