When Does Alt Season Start? 

Over the past year, altcoins have shown impressive performance, achieving double and even triple-digit gains, with some surpassing Bitcoin’s growth. Certain altcoins have even managed to outperform Bitcoin in shorter periods.

Data from CoinMarketCap indicates that Bitcoin experienced a 107% increase in the last year, while Solana’s SOL jumped by 308%, Avalanche’s AVAX rose by 80%, and Chainlink’s LINK climbed by 136%. Recent insights from the on-chain analytics firm Glassnode reveal that Bitcoin and Ethereum are currently leading the cryptocurrency market, with year-to-date increases of 17.6% and 18.2% respectively. Despite this, Bitcoin’s growth has outpaced the combined market capitalization of altcoins.

Alice Kohn, an analyst at Glassnode, pointed out that the collective market cap of altcoins has grown less than half as much as that of Bitcoin and Ethereum. Glassnode has observed that after the approval of spot Bitcoin ETFs in January, Ether briefly surpassed Bitcoin’s performance before falling behind on February 8.

Glassnode also utilizes the Realized Cap metric to track the performance of digital assets, which calculates the total cost basis of all on-chain transactions. According to this metric, Bitcoin remains dominant, attracting around $20 billion in capital inflows monthly, with its market cap surging by 1000% since October 2023.

The report suggests that capital transitions into altcoins more gradually than between Bitcoin and Ethereum, with Bitcoin maintaining over 52% of the total digital asset market cap.

Assessing Altseason Potential

While there are indications of an upcoming altcoin season, it may still be premature to confirm. Glassnode’s altseason indicator has shown positive momentum since last October and turned distinctly positive on February 4, following a brief dip during the sell-off triggered by the Bitcoin ETFs’ approval.

The indicator has remained positive, signaling a risk-on sentiment among investors towards altcoins. However, data from Blockchain Center indicates that only 59% of the top 50 altcoins have outperformed Bitcoin over the last 90 days. To officially declare an altcoin season, this figure needs to exceed 75%.

In conclusion, Glassnode’s analysis suggests a burgeoning yet cautious optimism towards altcoins, primarily concentrated in assets with larger market caps. Although signs of an altcoin season are evident, declaring its start might still be premature.