Is Altcoin Season Back? Bitcoin Holds Steady While ETH, SUI, and SEI Gain Momentum

What You Need to Know:

Indicators suggest a renewed altcoin season, with capital shifting from Bitcoin as CryptoQuant’s MVRV metric indicates sustained altcoin momentum for several weeks, a first in over a year.
Leading tokens include SUI (+36%), SEI (+41%), and Ether (+23.3%), while meme coin interest has lessened, hinting at a preference for projects demonstrating real activity.
If Bitcoin stays elevated above $112,000, it may encourage further altcoin growth, but rapid BTC fluctuations could divert liquidity from altcoins.

Bitcoin recently hit fresh highs, nearly reaching $124,000 before profit-taking led to a correction. Many view this as the dawn of the latest “altcoin season,” where cryptocurrencies (aside from Bitcoin) are seeing notable increases.

Currently, the bullish trend around Bitcoin has primarily centered on its own performance, particularly with institutional interest in spot Bitcoin ETFs and BTC-aligned treasury assets.

Continued Shifts in the Market:

However, altcoins have started making waves this week, registering gains of 50% to 80% as investments redirect from Bitcoin to riskier options.

Ethereum has benefitted from institutional momentum, rising by 23.3%, compared to Bitcoin’s 9.3% gain this week. Other layer-1 platforms, like SEI and SUI, have also made impressive jumps, both seeing increases of 41% and 36%, respectively.

Are We Entering an Altcoin Season?

Past altcoin seasons have often been marked by excitement and speculative trading, driven by crypto influencers and celebrities. This time, however, the movement seems more strategic, favoring altcoins associated with active projects like SUI.

Evidence from CryptoQuant indicates a shift toward altcoins, with MVRV metrics recently entering altcoin season territory for consecutive weeks, reminiscent of bullish trends in previous cycles.

Furthermore, a decline in meme coin dominance since the year began suggests a pivot towards projects grounded in utility rather than speculative fun. CoinDesk’s CD20 index has surpassed the CD5 index, reflecting a positive shift toward altcoins overall.

Currently, CoinMarketCap’s altcoin season index has increased to 36, a notable level not observed in the last three months.

What Lies Ahead?

The future of altcoins remains closely tethered to Bitcoin. If BTC can maintain above its previous highs at $112,000, further upward movements in altcoins remain likely.

However, if Bitcoin’s price rises into unknown territories or dips below $112,000, altcoins may falter in comparison. The market’s inherent lack of liquidity to accommodate large price changes may lead investors to prioritize Bitcoin’s rally instead.