Is a New Altcoin Season Dawning? Comparing Bitcoin and Altcoins Outlook

Key Points

• Bitcoin’s dominance might decline, potentially triggering an altcoin season.
• Altcoins could experience greater gains in the long term, especially if Bitcoin’s dominance starts to decline.

Bitcoin [BTC] remains above $100k on the price charts, yet Google Search trends have shown a slight decrease. This implies that while traders are still interested in BTC, the possibility of an altcoin season is on the horizon.

Potential Altcoin Dominance Amid Reduced BTC Supply

The UTXO age bands have shown a decrease in mid-to-long term holders. Historically, such a trend has triggered price rallies and altcoin hikes. As more people bought Bitcoin and others sold, BTC’s market share peaked before funds started to flow towards altcoins. Even with higher prices, the number of older UTXO bands hasn’t reduced significantly, indicating that long-term holders are being cautious. This could explain why Bitcoin has always mildly rebounded and altcoins have dropped further.

Despite this, a general drop-off is still evident. Altcoins usually boost their performance in the latter half of each cycle. The current market may be hesitant, but it suggests that distribution could be imminent. If Bitcoin surpasses certain resistance levels, funds could shift from Bitcoin to altcoins, driving their prices up. Conversely, if holders remain steadfast and new investors are less active, altcoins may continue to lag.

Altcoins in Bull and Bear Markets

As of now, macro trends suggest that the altcoin bear market might end soon, but the bull market is yet to commence. Historically, both 2016 and 2020 marked market lows before substantial bull markets began. The current conditions may be ripe for a new growth cycle. The next 1–3 years could see different market conditions, potentially leading to stronger altcoin gains as the market has been consolidating for a longer period.

The CMC Altcoin Season Index currently reads 22, indicating that an altcoin season is not imminent. While altcoins do hold a significant market share, it has not increased significantly in recent months. However, there is room for optimism. Although the altcoin market is not in a bull phase at present, previous trends and the current macro situation could trigger one soon.