Altcoin Season May Come Later Than Expected. Here’s Why: Glassnode

The highly-anticipated altcoin season (altseason) may come much later than market participants have been expecting, judging by the market’s current condition.

A report by market intelligence firm Glassnode revealed that the total altcoin market cap has fallen by $234 billion in the last two weeks, with several days recording large declines. This steep plunge is similar to the declines seen in bear markets and represents one of the largest altcoin devaluations ever.

Altcoins need to significantly recover from their current lows before experiencing the kind of rallies seen in altseasons.

Altseason to Come Much Later

Altseason refers to a period when capital rotates from bitcoin (BTC) to alternative cryptocurrencies like ether (ETH), Solana (SOL), Cardano (ADA), and Polygon (POL). During this time, investors’ focus shifts from BTC to other assets, and as a result, these cryptocurrencies see a significant increase in their value, with some surging to new all-time highs.

One major sign that the altcoin season is on the horizon is that bitcoin’s dominance begins to dwindle. Currently, the case is the opposite.

Data from the on-chain intelligence platform IntoTheBlock shows that bitcoin’s dominance has been increasing since 2023 and currently accounts for more than 70% of the combined market capitalization of the top 300 cryptocurrencies. On a broader scale, the leading digital asset sits on more than 61% of the total crypto market cap.

An analyst on X mentioned that bitcoin’s dominance is now at its highest since March 2021. This growth has been driven by the asset’s position as digital gold, growing institutional interest, and advancements across Bitcoin’s layer-2 networks.

Bitcoin Dominance Expands

While bitcoin’s dominance continues to expand, the number of daily active addresses for most altcoins still hovers way below their previous highs in 2021. This shows that retail investors are yet to rotate their capital to altcoins, as typically seen during altseasons.

It is worth mentioning that BTC has also experienced a significant downturn in the past two weeks; however, Glassnode noted that the severity of the damage aligns with previous local corrections. On the other hand, altcoins have undergone a broad sell-off, failing to find firm footing. Only a few altcoin sectors have been spared from the damage.

“This has led to one of the largest Altcoin devaluations on record, and highlights a notable dislocation between Bitcoin and the typical rotation of capital prior market cycles have seen towards the altcoin landscape,” Glassnode said.