Will there still be an altcoin season after BTC becomes integrated with US stocks (taking NDX and Russell 2000 as examples)

After the BTC ETF was approved, BTC began to follow the Nasdaq's movements and gradually became a leading indicator during US stock market closures. However, in this cycle, as BTC rose, there was no explosive growth of altcoins as seen previously. Therefore, we will compare altcoins with the Russell 2000 to observe the fluctuations of this altcoin season.

First, the conclusion:

1. An altcoin season will occur after BTC peaks, but overall, the increase will not exceed that of BTC (some sectors may experience explosive growth).

2. The scale is far below the previous growth when BTC had an independent narrative.

3. When the market is declining, altcoins often experience larger drops, making it difficult to hedge quickly.

4. BTC will continue to outperform the total altcoin index after becoming integrated with US stocks.

Comparison and analysis of Nasdaq and Russell 2000

NDX acts as a leading indicator during bull markets, especially benefiting from the rapid development of technology, AI, software, and chip industries in this round. Therefore, during bull markets, NDX significantly outperforms the Russell 2000.

US2000 generally performs well during economic recovery and liquidity easing but faces greater pressure in a high-interest-rate environment. (Figure 2)

In a rising market, NDX is more attractive, but in times of market uncertainty or increased downside risk, US2000 may offer more defensiveness and stability.

Is the high point of US2000 a signal for the Nasdaq to peak?

The high point of the Russell 2000 typically indicates that NDX is about to face a peak or pullback. When the market is overheated, small-cap stocks (which dominate the Russell 2000) may face selling pressure first, serving as a 'warning signal' for the market, as these stocks are more sensitive and easily influenced by changes in market sentiment.

During market pullbacks, US2000 often experiences larger declines, while NDX's retreat is relatively smaller due to the stronger resilience of large-cap technology stocks.

Therefore, the high point of US2000 will reflect changes in the market in advance and become a 'leading indicator' for NDX peaking.