What next for altcoin season as Ethereum ETFs begin trading this week?
- Analysts claimed that the Alt season could lag amidst a possible BTC dominance surge. But other observers expected the alt season to be trigged by the US spot ETH ETF launch.
The altcoin market could hit an inflection point this week as US spot Ethereum [ETH] ETF begin to trade. As the largest altcoin, ETH performance could set the pace for the altcoin sector.
However, per renowned crypto analyst Benjamin Cowen, the altcoin season could lag amidst a potential surge in Bitcoin [BTC] dominance ahead of a likely Fed rate cut in September.
According to Cowen, the current BTC dominance mirrored the 2019 pattern, two months before the Fed cut rate happened and Alts failed to catch up.
‘BTC also had an explosive move back then too, and ALTs could just not keep up. Similar candle today, potentially 2 months before the 1st rate cut.’
Source: X/Benjamin Cowen
Will Ethereum ETF trigger Alt season?
This could be bad news for crypto investors who were expecting relief from the altcoin market, which saw massive drawdowns in June.
In addition, the Altcoin Season Index indicator revealed that the alt season was not in just yet, as of press time.
Source: Blockchain Center
According to the indicator, the first half of 2024 has been a Bitcoin season. And if Cowen’s projections are correct, this pattern could continue.
However, BTC Dominance is just one way to gauge the Altcoin season. According to some analysts, including Glassnode founders, the other is the ETH/BTC ratio.
ETH/BTC tracks ETH performance relative to BTC. According to Glassnode founders, who go by the username Negentropic on X, the ratio was tipped to rip off and trigger altcoin season if the US spot ETH ETF begins trading.
The products are set to launch and start trading this week.
AMBCrypto’s evaluation of the ETH/BTC ratio showed that it surged after the partial approval of ETH ETF in May. However, the ratio was yet to break its downtrend, as denoted by the descending channel (white).
Source: ETH/BTC, TradingView
It remains to be seen how the ETH/BTC will react and whether it could trigger the altcoin season. So, the BTC Dominance and ETH/BTC ratio were key fronts to track and gauge the possible impact on altcoins.
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