- Altcoins are giving off mixed signals.
- Market analysts are weighing in on the sluggish performance.
- Optimism remains high for an altcoin season breakout.
Bullish patterns in the crypto market follow a pattern, typically ignited by positive signals in Bitcoin (BTC) that spread over to the broader asset class. However, this time around, altcoins have struggled to keep pace during Bitcoin’s latest surge, struggling to gain any notable traction.
The lackluster trend has prompted industry-wide questions about what is driving the lag and in response, market experts are weighing in.
Why Altcoin Season Is Behind Schedule
CryptoQuant founder and CEO Ki Young Ju has offered insights into the ongoing underperformance of altcoins, identifying factors hindering the expected surge.
At the heart of the lag is a shift in capital flow into Bitcoin. Unlike past cycles, the current rally is fueled by institutional investors and spot ETFs rather than retail traders, who historically drove Bitcoin-to-altcoin money rotations. Institutions tend to hold Bitcoin long-term and operate outside traditional crypto exchanges, and the change in dynamics has disrupted the usual trickle-down effect where Bitcoin gains spark altcoin rallies.
According to Ju, while some major altcoins might catch the eye of institutions through ETFs and investment funds, the bulk of smaller altcoins still rely on exchange-driven activity. Without fresh retail interest, the much-anticipated altcoin season may remain elusive.
The analyst further highlighted the altcoin market’s liquidity issues, with market capitalization below previous highs, signaling reduced fresh capital inflows. Without fresh investments flowing in, these altcoins may struggle to regain momentum.
Despite the roadblocks, there’s room for optimism.
Hopes Remain for Altcoin Season Breakout
Ju believes that renewed retail excitement and a boost in exchange activity could reignite altcoins. The optimism is fueled by the expectation for the growing institutional interest in Bitcoin to widen to include altcoins, potentially sparking the long-awaited rally.
This echoes broader positive sentiment among other analysts. According to Rekt Capital, stability in BTC’s price within the $91,000 and $100,000 range, could create an opportunity for an Ethereum-led altcoin breakout.
The latest take builds on Rekt’s previous analysis that Bitcoin’s uptrend could create a positive environment for altcoins to thrive. CryptoQuant’s Ju, however, emphasized that altcoins must focus on building independent strategies to attract new capital rather than relying solely on Bitcoin’s momentum.
On the Flipside
- Some altcoins, like Solana (SOL) have performed impressively despite the broader trend.
- Bitcoin recently suffered a price slip, but the token has managed to make slight recovery, trading over $95,000 at press time.
Why This Matters
A bullish crypto market is incomplete without an altcoin surge, making its delay a notable setback.
Read more about expectations for a surge in altcoins:
Why Altcoin Season Is Next in Line Post Bitcoin-Breakout
Tether is facing regulatory pressure in the EU and the issuer is cutting one of its stablecoins:
Tether Axes Stablecoin Offerings Amid Shifting EU Regulations
