The launch of altcoin season depends on several key signals:
1. Bitcoin needs to 'hold steady'. When BTC's volatility drops below 20% and its dominance hovers in the 55%-60% range, funds will have the confidence to flow out of Bitcoin and into altcoins. Recently, after BTC hit new highs and began to oscillate, if it can stabilize between 110,000 and 115,000, that would be the first signal.
2. Fund rotation needs to show real signs. Focus on stablecoin reserves—exchange USDT/USDC balances have increased for two consecutive weeks, and the number of altcoin wallet addresses has grown over 15% week-on-week, indicating that retail investors and small to medium-sized funds are starting to enter the market. Recently, the number of ETH on-chain transactions has rebounded, which may be a sign of warming up.
3. There needs to be a 'leading figure' to break the deadlock. In previous altcoin seasons, a specific sector has driven the trend; in 2021, it was DEFI, and in 2023, it is Layer2. Currently, either the Ethereum Cancun upgrade leads to an explosion in the Layer2 ecosystem, or a public chain emerges with a killer application, providing a 'narrative anchor' that attracts funds.
4. The sentiment needs to be hot enough. The Fear and Greed Index breaks 70 and enters the greedy zone, and discussions of altcoins on social media platforms increase by over 50% week-on-week; only then will small-cap coins take the stage. Right now, there’s still a way to go, but the signs are emerging.