Cryptocurrency exchange Coinbase assesses that as Bitcoin's market share continues to slide, institutional demand for Ethereum remains strong, and with loose capital gradually surfacing, the altcoin market is expected to welcome a 'peak season' in September.
David Duong, Global Research Director at Coinbase Institutional, wrote in Thursday's monthly outlook report:
As September approaches, we believe current market conditions indicate that the altcoin peak season will fully erupt.
Coinbase defines the 'altcoin peak season' as: at least 75% of the top 50 altcoins by market capitalization have outperformed Bitcoin over the past 90 days. The market is still some distance from this threshold, but multiple indicators have shown signs of rising.
The overall economic environment paves the way for capital shifts
David Duong added that a large amount of retail capital is still parked in money market funds, and if the Federal Reserve (Fed) initiates a shift towards loose monetary policy, there will be an opportunity in the medium term to release more retail funds back into the market.
In the United States, the year-on-year increase in the Consumer Price Index (CPI) for July remains at 2.7%, raising the probability of a rate cut in September to 92%. For high-risk assets, a low-interest-rate environment has always been one of the positive catalysts, and altcoins will naturally benefit from this.
Bitcoin market share decline
Another key variable is the decline in Bitcoin's market dominance. Since peaking at over 65% in May, Bitcoin's market share has now dropped to 59%, reaching a low not seen since January, indicating that funds are gradually shifting from Bitcoin to other crypto assets.
Technically, Bitcoin's market share has shown a monthly 'bearish crossover' for the first time since January 2021.
Cryptocurrency trader Ito Shimotsuma pointed out that this situation once triggered a four-month rally in altcoins, 'if history repeats itself, this rally may extend until December 2025.'
'Altcoin Peak Season Index' rises
David Duong also observed that although the major altcoin peak season indices are still some distance from the activation threshold of '75 points', the overall market capitalization of altcoins has surged more than 50% since early July.
According to CoinMarketCap data, the 'Altcoin Season Index' currently stands at 44, significantly up from the 25 level in July; Blockchain Center's index is at 53 (neutral range), while CryptoRank reports 50.
Institutional funds prefer Ethereum
David Duong believes that the current upward momentum is mainly driven by themes such as 'corporate hoarding of coins' and 'stablecoin applications', while the gap between 'the rise in altcoin market capitalization' and 'the altcoin peak season index remains neutral' reflects increasing institutional interest in Ethereum.
David Duong emphasized:
As the total market capitalization of altcoins continues to rise and the altcoin peak season index releases early positive signals, we believe the market is heading towards a more mature rotation of altcoin peak season, possibly officially kicking off in September.
Experts: The market lacks decisive catalysts
Joanna Liang, founding partner of Singapore venture capital firm Jsquare, stated that to form a mature altcoin peak season, three major conditions must be met: a favorable overall economic environment, a continuous decline in Bitcoin's market share, and compelling new narratives.
She pointed out that the altcoin peak seasons in 2017 and 2018 were ignited by ICOs (Initial Coin Offerings); the 2018 and 2019 seasons were driven by public chains (Layer 1); and the 2021 and 2022 seasons were driven by DeFi and NFTs. She added:
In this bull market cycle, the market is still waiting for a core catalyst strong enough to attract a large influx of new funds and truly ignite the altcoin peak season.
This article is authorized for reprint from: (Block客)
Original Title: (Bitcoin Market Share Drops to Six-Month Low! Coinbase: Altcoins to Welcome 'Peak Season' in September)
Original Author: Block Girl MEL
'BTC market share falls below 60%, Coinbase predicts ETH demand will soar, will September welcome the altcoin season?' This article was first published on 'Crypto City'
