Is the Altcoin Season Over? Here's the analysis!

Bittime - Altcoin season is often a place for digital assets other than Bitcoin to experience significant price spikes. However, at the end of 2024, many are questioning whether the heyday of altcoins has passed or there are still great opportunities ahead.

The main indicator of concern is Bitcoin's Dominance Rate (BTCD), which has been rising since September 2022 and peaked in November 2024 at 61.53%.

Despite a small dip, BTCD has not shown any signs of the usual sharp decline before altcoin season begins. Is this a sign that the altcoin season will be delayed or even over?

Also read: Satoshi Nakamoto talks about the advantages of Ripple and XRP

BTCD and Altcoin Market Capitalization: What's Really Happening?

One important indicator in determining altcoin season is the movement of BTCD. Historically, when BTCD drops significantly, altcoins have a chance to dominate the market.

However, after peaking in November 2024, BTCD only fell for three weeks before rallying back. This is different from previous cycles where there was a sharper decline before altcoins took over.

On the other hand, the altcoin market capitalization (ALTCAP) is yet to show new all-time highs. ALTCAP is currently still consolidating at around $1.25 trillion, far from the expected target of between $2.14 to $2.19 trillion.

In previous cycles, the altcoin season was usually marked by the achievement of a new market capitalization record, which has yet to happen.

Abundant supply of altcoins poses new challenges

The number of altcoins circulating in the market is also a factor hindering this altcoin season. Compared to the 2017-2018 cycle which only had around 3,000 altcoins, there are now more than 36.4 million altcoins. With a much larger supply than demand, altcoin movements have become less aggressive than in previous cycles.

In addition, many altcoins have emerged as mere speculation with no real utility. This phenomenon makes investors more selective in choosing digital assets that have the potential to survive in the long run.

Also read: Crypto assets made in the US will be tax-free including HBAR and XRP, here's the list!

Will Altcoin Season Happen in 2025?

Although current conditions seem less favorable, some analysts remain optimistic about the altcoin season in 2025. Ethereum (ETH) is predicted to be one of the digital assets leading the next rally, especially with increasing institutional interest in utility-based assets.

However, for a significant altcoin season to occur, two key things are required: a drastic drop in BTCD and a rise in altcoin market capitalization above the previous record. If these two conditions are met, then altcoin season is still likely to occur in 2025.

For investors, it is still important to do in-depth research before investing in altcoins. Although the potential for great returns still exists, the increasingly competitive digital asset market demands a more careful and measured strategy.

So, is the altcoin season over? The answer is uncertain, but the opportunity for altcoins to make a comeback is still there-especially for assets that have real utility and strong institutional backing.

FAQ

What is Altcoin Season?

Altcoin season is a period where digital assets other than Bitcoin experience significant price spikes, often outperforming Bitcoin over a period of time.

Is the Altcoin Season over?

Not quite yet. Although there are signs of a weakening altcoin season at the end of 2024, there is still a chance for altcoins to rise again in 2025 if BTCD falls and altcoin market capitalization increases.

What are the main factors that influence the altcoin season?

Some of the major factors include Bitcoin's dominance rate (BTCD), altcoin market capitalization, institutional interest, and altcoin demand and supply in the market.

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References

ccn.com, Altcoin Season Still on Track Despite Bitcoin's Dominance in the Market, accessed on January 29, 2025.

cointelegraph.com, Too many tokens? Analysts argue oversupply could end altcoin season, accessed on January 29, 2025.

Author: AWW