Experts debate the true drivers of the altcoin rally, pointing to sentiment and stablecoin liquidity.
- Altcoins are gaining momentum, sparking debates on what drives this new market phase. Experts highlight market trends and sentiment as key factors behind altcoin strength.
The market is experiencing a notable surge in altcoins, sparking discussions across the industry about the onset of the long-anticipated altcoin season.
With Bitcoin’s [BTC] dominance showing signs of decline, some market participants believe this shift could be the catalyst for a new phase.
However, experts are divided on the true drivers behind the altcoin rally, with many arguing that broader market trends, rather than just Bitcoin’s reduced dominance, play a significant role.
Additionally, the growing influence of factors like stablecoin liquidity is reshaping the dynamics of the altcoin cycle, raising important questions about what’s truly fueling this latest market movement.
Key factors driving altcoin season
Jamie Coutts, Chief Crypto Analyst at Real Vision, has provided valuable insights into what truly triggers an altcoin season, shifting the focus away from Bitcoin’s dominance.
Rather than relying solely on Bitcoin’s market share, Coutts highlighted the importance of market breadth – specifically, the performance of altcoins relative to Bitcoin.
Source: X
Currently, the Altseason indicator sits at 67%, signaling growing altcoin strength. However, Coutts notes that a full-fledged altcoin season only begins when this indicator reaches 75%, offering a more comprehensive approach to understanding market cycles.
His viewpoint challenges conventional wisdom and encourages traders to broaden their analysis beyond Bitcoin’s dominance.
Does altcoin season no longer hinge on asset rotation?
Source: TradingView
Ki Young Ju, CEO of CryptoQuant, has emphasized that the altcoin season narrative is evolving beyond traditional asset rotation from Bitcoin.
He argues that the increasing utility of altcoins individually, along with distinct market drivers, are reshaping this cycle. According to Ju, the surge in altcoin trading volume is now being driven by Stablecoin and fiat pairings rather than Bitcoin pairings, signaling real market expansion rather than simple asset rotation.
This shift highlights the growing importance of stablecoin liquidity as a key indicator of market direction, suggesting that the dynamics behind the current altcoin rally are more complex than previous cycles dominated by Bitcoin.
The role of market sentiment in the altcoin movement
Market sentiment plays a crucial role in the current altcoin rally, as investor confidence shifts away from Bitcoin and embraces altcoins.
Positive sentiment towards new developments, such as the rise of decentralized finance (DeFi) and innovative blockchain projects, fuels great demand.
Additionally, as altcoins outperform Bitcoin in certain market conditions, the psychological shift among traders and investors accelerates the movement.
This collective optimism contributes significantly to the ongoing surge, reflecting a broader, more diversified market outlook beyond Bitcoin’s dominance.
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