“Altseason is no longer defined by asset rotation from Bitcoin,” said Ki Young Ju, CEO at CryptoQuant.
The crypto market could be on the verge of a major shift, potentially marking the much-anticipated altcoin season. However, the reasons behind the shift have evolved this time, signaling a broader change in market dynamics. Traditionally, altcoin season – when alternative cryptocurrencies outperform Bitcoin BTC $83 086 24h volatility: 1.8% Market cap: $1.65 T Vol. 24h: $56.22 B – has been fueled by traders rotating capital from Bitcoin into altcoins.
According to Ki Young Ju, CEO of CryptoQuant, this pattern no longer holds true. He highlighted a different driver for this potential altcoin boom: trading activity in stablecoin and fiat currency pairs. Unlike earlier cycles, Bitcoin pairs are no longer the primary trading avenue for altcoins. In a Dec. 2 post on X, he stated:
“Altseason is no longer defined by asset rotation from Bitcoin.”
Altcoin Trades Shift to Stablecoins
Recent trends show altcoin trading volumes for Bitcoin pairs have remained consistently low. Even as Ethereum ETH $1 795 24h volatility: 4.0% Market cap: $216.55 B Vol. 24h: $25.22 B price climbed, Bitcoin trading pairs for altcoins failed to see significant movement. That shift is especially notable as altcoins like XRP XRP $2.03 24h volatility: 3.9% Market cap: $118.17 B Vol. 24h: $6.32 B and Solana SOL $115.8 24h volatility: 8.0% Market cap: $59.31 B Vol. 24h: $7.84 B are approaching their all-time highs.
Meanwhile, trading volumes for altcoins against stablecoins have surged. Ki observed that this trend signals “real market growth rather than asset rotation,” emphasizing the increasing importance of stablecoins. He added, “Stablecoin liquidity better explains the altcoin markets,” underscoring the pivotal role stablecoins play in the evolving market.
The surge in altcoin volume also indicates a more sustainable market evolution. Stablecoins, which provide liquidity and price stability, have become instrumental in driving altcoin demand. As a result, the reliance on Bitcoin as a benchmark or trading intermediary appears to be diminishing.
Stablecoin Liquidity Reshapes Crypto Market
In addition to stablecoin liquidity, institutional capital has emerged as a critical factor in reshaping the market. Unlike earlier cycles dominated by retail investors, the current bull market is seeing robust capital inflows into Bitcoin spot exchange-traded funds (ETFs).
Photo: Ki Young Ju
This shift marks a departure from the speculative, retail-driven momentum of the past. Institutional investment brings a layer of credibility and stability, which could benefit the broader crypto ecosystem, including altcoins.
Despite these positive signals, the overall market capitalization of cryptocurrencies excluding Bitcoin remains well below its all-time high. This suggests that a substantial influx of fresh capital is still required for altcoins to achieve new peaks. Ki noted:
“For altcoins to reach a new all-time high market capitalization, they will require a significant influx of fresh capital to crypto exchanges.”
The altcoin season index, a measure tracked by Blockchain Center, offers further clues about the market’s direction. This index identifies an altcoin season when 75% of the top 50 coins outperform Bitcoin over a 90-day period. Currently, the index shows that 73% of the leading 50 altcoins have outperformed Bitcoin in the last 90 days. With this figure climbing steadily, the threshold for declaring an official altcoin season appears within reach.
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