A recent report from asset management company Swissblock, along with analyses from other experts, shows that the crypto market is entering the early stages of the altcoin season.
Although Bitcoin still dominates significantly, experts believe the market landscape will soon change. This article will analyze the reasons behind that assertion.
The first signs of the altcoin season are appearing
Altcoin Vector - Swissblock's institutional-grade altcoin market report confirms that the altcoin season has begun. Their research team believes that the market is showing clear signs of capital flow shifting from Bitcoin to other altcoins.
This is not just speculation, but is also reflected through two key indicators that Swissblock uses: Impulse and Structure, both of which help track market trends.
Impulse measures the percentage of altcoins showing exceptional growth strength and signaling a transition. Currently, only 8% of altcoins have recorded a decline since June. Historically, market bottoms often form when this number fluctuates between 15-25%. Therefore, Swissblock believes that the altcoin market is very likely nearing its bottom.
Structure assesses whether the market is in a breakout state. Analysis shows that the market capitalization of altcoins (TOTAL3) has broken out with a 22% increase. According to historical data, such breakouts typically lead to market cap increases of 67% to 96%.
"We are in the early stages of the altcoin season. And according to our model, the issue is not whether it will happen or when it will happen - but how strong it will be," the Altcoin Vector report concludes.
A recent report also reinforces the assertion from Swissblock, stating that Bitcoin's dominance rate has decreased from 66% to 64%, even though Bitcoin's price has just set a new all-time high. This indicates that altcoins are capturing market share faster than Bitcoin.
The altcoin season index has reached its highest level since February
According to data from Blockchaincenter, the altcoin season index currently stands at 35 - the highest since February this year. According to this index, the altcoin season is officially confirmed when 75% of the top 50 coins outperform Bitcoin over 90 days.
Although it hasn't reached the threshold of 75, the recent increase to 35 is quite noteworthy. This number indicates a strong improvement compared to the past 4 months and is boosting positive expectations for the altcoin market.
More analysts are becoming increasingly confident in this prediction. Renowned analyst TechDev believes that the altcoin market has been suppressed for the past 4 years and is now ready to break out. Meanwhile, Michaël van de Poppe emphasizes that this is the best time to buy altcoins and take profits within the next 12 to 24 months.
However, research analyst Nicolai Sondergaard at Nansen warns that even if the altcoin season occurs, it may not resemble previous cycles.
"I find it very difficult to assert whether the long-awaited altcoin season will actually happen this time. The dominance rate of BTC remains high, at 64.59%. Although there have been signs of a slowdown, perhaps due to capital flowing into larger coins like ETH, SOL, and HYPE, this does not necessarily mean that the capital flow will continue to spread to smaller altcoins as in previous cycles. One of the major challenges currently facing the altcoin market is token saturation," Nicolai Sondergaard shared.
At the time of writing, the market capitalization of altcoins (TOTAL3) has reached $933 billion, up more than 14% since the beginning of July.
