A closely watched indicator in the cryptocurrency market pointed out that technically the altcoin season has entered. However, this time the picture is not due to a strong rise in altcoins, but to a sharper depreciation of bitcoin. Glassnode’s Altcoin Cycle Signal data shows that altcoins relatively outperform bitcoin when it rises above the 50 level. In the last measurement, it was seen that this indicator increased to 86.
Why did the indicator rise?
The main reason the data stands out is not because alternative cryptocurrencies started a strong rally, but because bitcoin fell faster. Since the indicator tracks relative performance, altcoins can take the lead in two different situations. The first of these is that prices rise, and the second is that there is a more limited loss as bitcoin falls. It is reported that the second scenario stands out in the current table.
Glassnode, one of the well-known research companies in the field of on-chain data and market analysis, emphasized in its assessment that bitcoin is still the main determinant of the movement.
According to Glassnode, the indicator turning into altcoin season does not mean that there is strong demand in altcoins; The current outlook is mostly due to bitcoin’s faster decline.
According to CoinDesk data, the bitcoin price retreated towards the $63,600 level again. On the other hand, it is stated that after the weak course of almost two years in altcoins, seller pressure has decreased and prices have displayed a more balanced appearance. Therefore, the indicator does not reflect that altcoins are strengthening in absolute terms, but rather that they remain relatively resilient.
Difference from real altcoin season
A true altcoin season in the market is defined by capital moving into smaller tokens and seeing significant increases in the prices of these assets. The view here is different. Although the indicator has turned up, this movement is fueled by the acceleration of bitcoin sales, not by optimism spreading throughout the market. This is not a supportive sign for the general market, but a sign that can be read more cautiously.
Relative strength alone does not mean rise; The fact that altcoins have fallen less than bitcoin alone does not indicate that a broad-based recovery has begun in the market.
The analysis states that unless altcoins start to produce an increase on their own, the signal in question points to weakness in bitcoin rather than altcoin demand. In other words, there is a period in which altcoins are only holding their own for now, while bitcoin remains under pressure.
Therefore, although the current level of 86 may seem positive at first glance, the dynamics behind the indicator are carefully evaluated. The decisive factor for market players will be whether altcoins will show an independent upward trend in the future without accompanying the decline of bitcoin.
