These three charts are very interesting.
1. The market capitalization ratio of Bitcoin is approaching a sensitive area. In 2017, 2019, and 2020, it reached over 70% three times, which triggered varying degrees of altcoin seasons. So to see if an altcoin season will come, we first look at BTC's market capitalization.
Why can't it go higher? Since historically it has been blocked in the range of 71%-73% three times, this indicates that this is the threshold for Bitcoin's share in the entire crypto market. Exceeding this threshold would definitely make it unsustainable for the industry, which is why it has been blocked in this range multiple times.
Currently at 65%, there is still a bit of distance to 70%. However, what is different this time is that in 2017 there may have been only a few hundred altcoins, but now there could be tens of thousands of altcoins. With more variety, the market capitalization has decreased, which is why altcoins have remained stagnant.
This time BTC's market capitalization has taken years to fluctuate upwards, which can explain a bit that we are clearing out more altcoins. As for when the altcoin season will arrive, it depends on whether Bitcoin's market capitalization can show an accelerated trend in its upward fluctuation; many coins might face decline. However, given the threshold that is being hit, we can use Bitcoin's market capitalization to measure when the altcoin season arrives.
2. The ETHBTC (inverted axis) and Bitcoin's market capitalization trends are exactly the same, which directly indicates that there are only two coins in the market: one is BTC and the other is collectively referred to as ETH, which represents a basket of altcoins. ETHBTC has dropped back to the 2020 low, while BTC's market capitalization has not yet reached the 73% position of 2020. This shows that more altcoins have eaten into ETH's market capitalization share, such as SOL, BNB, and others, but this does not affect the fit of ETHBTC (inverted axis) and BTC's market capitalization trend.
Looking back at the technical aspect, ETHBTC has a high possibility of showing an accelerated breakdown. This is not absolute, but it is definitely something to be wary of. If such a trend occurs, the bottom will come.
3. The ETHUSD (inverted axis) price has returned to when BTC's market capitalization was at the bottom at the end of 2022/23, when BTC's market capitalization ratio was around 40%. Now it is already 65%, while the price of ETHUSD at that time was just over 1000, and it is still just over 1000 now. This also explains why there is so much criticism now, as the entire market is like small grass, contrasting with the red flower that is BTC.
Conclusion:
It is hard to say whether the market is at a turning point for altcoins, but if it continues to make new lows and BTC's market capitalization approaches around 70%, then a bottom will definitely emerge, and it should be a bottom formed by linear participation.
Although the price of altcoins fluctuates repeatedly, the conditions for a full turnaround are too scarce. In this case, the tail risk must be guarded against, and the magnitude of this tail risk is hard to predict, but it is necessary to prepare for unexpected impacts.
Even though there are many reasons to buy ETH, seeing the current ETHBTC and BTC market capitalization ratio, these reasons will be discounted.
The short-term market is chaotic, and the difficulty has increased, so we need to simplify. There is too much noise in the current market, and if we do not filter it out, problems will arise. At the same time, we need to reduce risk exposure to safely get through this uncertain period.
