The cryptocurrency market is witnessing the delayed arrival of an altcoin boom in the current bull cycle. Crypto exchange and derivatives trading platform Bybit has released a joint report with the market research firm Block Scholes, detailing factors that may have delayed the altcoin season and those that are likely to trigger the boom in the coming months.
According to the report, potential catalysts for the next altseason include rising institutional involvement in altcoins, Ethereum outperforming Bitcoin, sustained retail interest in meme coins, and increased profit-taking among Bitcoin holders.
A Delayed Altseason
During such market periods, altcoins outperform major crypto assets, especially Bitcoin (BTC). There is typically capital rotation from BTC into smaller and riskier projects, leading to significant rallies in the value of these cryptocurrencies. Bybit pointed out that the market has seen this trend during the past three bull runs, particularly in 2017 and 2021. In those instances, the prices of cryptocurrencies other than BTC reached new all-time highs (ATHs).
“However, one must also recognize that altseason often precedes the end of a bull run, as profit taking from large-cap tokens leads to a market correction,” Bybit noted.
Investors have been anticipating an altseason in this current bull cycle, yet it seems this cycle is unique. Bitcoin continues to achieve new ATHs and maintains its market dominance—contrary to previous patterns where this dominance typically declined during altseason.
Historically, Bitcoin’s dominance has decreased approximately 230 days post-halving; however, the last halving did not trigger the expected drop, implying that market behavior may have undergone a structural change.
Bybit asserts that several factors are influencing the current state of the crypto market, including the growing institutional adoption of Bitcoin via spot exchange-traded funds (ETFs). Another important aspect is Ethereum’s underperformance relative to Bitcoin and other significant altcoins like Solana. This has led traders to question Ether’s (ETH) capacity to spearhead the next altseason.
Wen Altseason?
The crypto exchange elaborated on factors that could potentially influence the onset and characteristics of the next altseason.
Firstly, Bitcoin holders need to increase their profit-taking activities. This could induce a market correction, subsequently prompting a capital rotation into altcoins. Additionally, Ethereum must demonstrate significant recovery and reassert itself as a market leader.
Moreover, there must be a growing interest in meme coins and less mainstream altcoins for the next altseason to materialize. Institutional interest in altcoins must also rise; this is likely to occur soon as U.S. regulatory agencies are currently reviewing applications for multiple altcoin ETFs.
The insights outlined above emphasize the importance of monitoring market dynamics in the cryptocurrency space. The potential for an altseason persists, yet it hinges on the interplay of several factors including profit-taking behavior, institutional engagement, and the revival of Ethereum’s prominence.
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