- The Altcoin Season Index has reached a two-month high above 45 suggesting altcoins are rallying
- However, this metric needs to hit 75 to confirm an altseason
Altcoins have seen considerable growth this week, alongside Bitcoin [BTC]. These gains have triggered a surge in the Altcoin Season Index to a two-month high of 45 as seen on Blockchain Center.
However, this index needs to reach 75 for an altcoin season to be confirmed. While this is yet to happen, the metric has been on a gradual rise, given that at the start of the month, it stood at 18.
Source: Blockchain Center
This data shows that sentiment towards altcoins is turning positive, but for this index to push above 75, altcoins need to extend their gains.
Altcoin performance against Bitcoin
Ethereum [ETH], the largest altcoin, has been underperforming against Bitcoin as the ETH/BTC ratio recently dropped to the lowest level since 2021.
This ratio had bounced back to above 0.04 at press time showing that ETH had made slight gains against Bitcoin. However, it remains at yearly lows.
Ethereum’s biggest rival, Solana [SOL], is the only altcoin among the top ten coins that has outperformed BTC in the last seven days after rising by 12%.
A look at the top 50 performance in the last 90 days also shows that a majority of altcoins are still in the red, with the top gainers being AAVE [AAVE)] and SUI [SUI], which are up by more than 50%.
Source: Blockchain Center
This suggests that altcoins need to extend their gains for the market to enter an altcoin season.
Will DeFi and NFT boom usher in altcoin season?
The decentralized finance (DeFi) and non-fungible token (NFT) industries play a role in influencing altcoin performance. These two industries have witnessed significant growth this week.
Per DeFiLlama, the Total Value Locked (TVL) across the DeFi industry has increased by more than $10 billion in two weeks and stood at $85 billion at press time.
However, there is still room for growth as DeFi activity remains below this year’s highs above $100 billion.
Source: DeFiLlama
The NFT space has also seen growth given that at press time, NFT sales volumes had increased by more than 40% as seen on CryptoSlam.
While these factors are making the case for an altcoin season, Bitcoin’s dominance remains at high levels. Bitcoin currently controls 54% of the cryptocurrency market per Coinstats.
The rise in BTC’s dominance could be attributed to Ether’s underperformance, with the largest altcoin’s dominance falling from 18% in early 2024 to 14% at press time.
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