If ETH can continue to "siphon" funds from BTC, the altcoin season may be about to begin.
Here are some understandings about the altcoin season:
Criteria for determining the altcoin season
1. The overall market first strengthens, with the primary indicator being a breakthrough of the March 2024 high—this is a preliminary signal of market recovery.
2. Further breaking through the historical highs of the entire market in 2021 means that funds and sentiment have significantly returned, and the crypto market has entered a high-intensity active cycle.
3. ETH reaching a new high indicates that mainstream funds have rotated from BTC to Ethereum and have begun to spread to the on-chain ecosystem.
4. BNB surpassing the $1000 mark—as one of the barometers of the altcoin market, its strength indicates that funds are beginning to accelerate towards various on-chain assets.
Typical path of fund rotation
Early bull market: Funds first flow into BTC → BTC market share increases → Altcoins are "bled dry" → Altcoins generally decline.
Start of altcoin season: Funds flow out of BTC → BTC's dominance decreases → Altcoins gain liquidity → Altcoins generally rise.
Only when funds gradually flow from BTC to ETH and other altcoins, and multiple leading projects continue to rise, does it meet the complete characteristics of an altcoin season. Sporadic increases in individual cryptocurrencies do not represent that a true altcoin season has begun.
