The altcoin season index has reached its highest level in two months: is this a bullish sign?
Altcoins need to increase their profits for the crypto market to enter altcoin season.
The altcoin season index has reached its highest level in two months, surpassing 45, indicating that altcoins are on the rise.
However, this metric needs to reach 75 to confirm another season.
Altcoins have shown significant growth this week alongside Bitcoin [BTC]. These gains have driven the altcoin season index to a two-month high of 45, as observed in the blockchain center.
However, to confirm an altcoin season, this index must reach 75. While this hasn’t happened yet, it has gradually increased from 18 at the beginning of the month.
Source: Blockchain Center
This data indicates that sentiment towards altcoins is turning positive; however, for this index to rise above 75, altcoins need to increase their gains.
Altcoin Performance Against Bitcoin
Ethereum [ETH], the largest altcoin, has underperformed against Bitcoin as the ETH/BTC ratio recently dropped to its lowest level since 2021.
At the time of publication, this ratio had returned to above 0.04, indicating that ETH has made slight gains against Bitcoin. However, it remains at an annual low.
Ethereum’s biggest competitor, Solana [SOL], is the only altcoin among the top ten coins that has outperformed BTC in the past seven days with a 12% increase.
A look at the performance of the top 50 coins over the past 90 days also shows that most altcoins are still in the red, with the top gainers being AAVE [AAVE] and SUI [SUI], which have both increased by over 50%.
Source: Blockchain Center
This indicates that altcoins need to increase their gains for the market to enter the altcoin season.
Will the DeFi and NFT Boom Initiate the Altcoin Season?
The decentralized finance (DeFi) and non-fungible token (NFT) sectors play a role in influencing altcoin performance. Both industries have seen significant growth this week.
According to DeFiLlama, the total value locked (TVL) in the DeFi sector has increased by over $10 billion in two weeks, reaching $85 billion at the time of publication.
However, there is still room for growth, as DeFi activity remains below this year’s peak of over $100 billion.
Source: DeFiLlama
The NFT space has also seen growth, with NFT sales volume increasing by over 40% at the time of publication, as noted by CryptoSlam.
While these factors are being leveraged for the altcoin season, Bitcoin’s dominance remains high. Bitcoin currently controls 54% of the cryptocurrency market, according to Coinstats.
The increase in BTC dominance can be attributed to the poor performance of Ether, as the altcoin’s dominance has decreased from 18% at the beginning of 2024 to 14% at the time of publication.
