It cannot be denied that the altcoin season has not arrived, and expert Benjamin Cowen pointed out the reasons in his recent video. The altcoin season is often defined as the period when altcoins outperform Bitcoin, both in USD value and compared to Bitcoin. History shows that this only occurs after Bitcoin's dominance ratio decreases, which has not happened in the current cycle.
This rally was evident in 2017 and from late 2020 to early 2021. However, since then, no real altcoin season has occurred, as Bitcoin continues to dominate the market. In fact, Bitcoin has solidified its strength, while many altcoins have shown a downward trend, both in USD and particularly when compared to Bitcoin.
Comparing 2017, 2021, and Now: Changes
The analyst used important charts to track the change, comparing the total altcoin market (excluding Bitcoin and stablecoins) with Bitcoin's market cap. In both the 2017 and 2021 altcoin seasons, this chart dropped to 0.25 before altcoins began to rise in price. Currently, this ratio remains around 0.31, indicating that altcoins are still high compared to Bitcoin. Therefore, a complete altcoin season is not feasible at this time.
It is also worth noting that in previous cycles, interest rate cuts from the Federal Reserve (Fed) and the end of quantitative easing (QT) played a crucial role in triggering the altcoin season. However, this time, there have been fewer interest rate cuts, and QT is still ongoing, albeit at a slower pace.
As a result, the level of risk in the market has decreased, making it difficult for altcoins to attract attention and liquidity.
Bitcoin's Dominance Ratio is Holding Back Altcoins
Many altcoins have decreased in price even as Bitcoin shows signs of rising. Although there have been some short-term price increases, most altcoins are still below their highs from earlier this year. The reality is that while a few coins have performed well, the overall altcoin market remains weak.
This cycle feels different, but similar patterns still occur, just at a slower pace. Altcoins have not yet reached the typical bottom threshold compared to Bitcoin. Until this happens, the emergence of an altcoin season seems unlikely. According to past trends, there is a possibility that the bottom will be reached in September or October.
Federal Reserve Movements Could Decide the Fate of the Altcoin Season
For altcoins to truly rise in price, additional interest rate cuts and a complete halt to quantitative easing may be needed. Monetary conditions remain tight, and market liquidity continues to prioritize Bitcoin. Until there is a change in the broader economic and policy environment, and until altcoins drop further in value compared to Bitcoin, the emergence of an altcoin season will be hard to achieve in the near term.
Source: https://tintucbitcoin.com/tai-sao-altcoin-season-chua-den/
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