The cryptocurrency market is abuzz with discussions about postponing the start of the altcoin season. While Bitcoin has surged due to institutional interest and demand for spot ETFs (exchange-traded funds), the altcoin market has remained relatively stagnant.
Analysts and industry insiders are analyzing the factors behind these phenomena, uncovering the technical interplay of capital flows, investor behavior, and market events.
Conflicting opinions on altcoin season delay
Kiyoung Ki, CEO of CryptoQuant, argues that the current Bitcoin (BTC) rally is significantly different from previous cycles. In a detailed thread on X (formerly Twitter), he explained that the nature of capital flowing into Bitcoin has changed. Institutional investors and spot ETFs, rather than retail traders on cryptocurrency exchanges, are now driving Bitcoin’s growth.
“Institutional investors and ETF buyers have no intention of converting their assets from Bitcoin to altcoins,” said Joo Ki-young.
He emphasized that these players operate outside of cryptocurrency exchanges, making it more difficult for assets to circulate. Moreover, smaller altcoins rely heavily on exchange users for liquidity, which has been lacking this cycle.
The CryptoQuant CEO suggested that new capital would need to flow into cryptocurrency exchanges for altcoins to hit new all-time highs, a trend that is not yet clear. While institutional funds can invest in major altcoins, smaller funds still rely on retail traders.
Joo Ki-young concluded that altcoins need an independent strategy to attract new capital rather than riding Bitcoin’s momentum. Despite this cautious outlook, he remains optimistic.
“Altseason will come, but it will be selective. “Not all altcoins will reach their previous ATH,” he added.
Not everyone agrees with the CryptoQuant CEO’s analysis. CryptoVizArt, a senior analyst and researcher at Glassnode, believes that the altseason has already begun. He highlighted Solana’s explosive active address growth, which currently has 18.6 million active addresses per day. This is almost 40 times that of Ethereum.
“Retailers have already chosen where they will gamble in this cycle,” CryptoVizArt said.
The researcher pointed to the popularity of meme coins and Solana-based projects as evidence that an alt season is underway. However, Kiyoung Ki partially agreed with this view.
“Altseason has launched for some major altcoins, but not others,” said a CryptoQuant executive.
Other analysts, such as Crypto Feras, take a more historical perspective. In their view, alt seasons traditionally occur in the later stages of the Bitcoin cycle.
“While Bitcoin was growing gloriously in the second half of 2020, altcoins collapsed and later rebounded,” Feras said.
They argue that the sheer number of altcoins today dilutes capital inflows, making the current alt season less impactful than previous cycles.
Psychology of Market Cycles
Another prominent community member, XForceGlobal, offered a nuanced critique of Joo Ki-young’s argument, emphasizing the role of psychology in understanding market behavior and metrics for dominance.
“It is impossible to measure the allocation of institutions and exchange users. “The market operates as a self-fulfilling prophecy,” he said.
They noted that alt seasons often lag Bitcoin’s rallies, as confidence in Bitcoin generally leads to altcoin growth.
“Altcoins will always lag, but when fund flows match, an alt season is inevitable,” concludes XForceGlobal.
Adding to the discussion, indicators such as the Ethereum-Bitcoin (ETH/BTC) ratio hitting historic lows suggest a possible shift in the market. Likewise, BeInCrypto reported that altcoins are poised for growth, driven by rising sentiment and key technical indicators.
However, the overall altcoin market capitalization is still below its all-time high, reflecting CEO Ki Young-joo’s concerns about the lack of fresh liquidity among exchange users.
The consensus among analysts is that altcoin season is here, but its size and scope remain uncertain. Institutional interest in Bitcoin has reshaped the market, reducing direct outflows to altcoins. Retail participation, which is essential for smaller altcoins, has shifted focus to niche sectors such as meme coins and Solana.
Ultimately, altcoins must independently innovate to attract new capital. Moving forward with unique use cases, partnerships, or technological innovations will require more than relying on Bitcoin’s momentum.
Joo Ki-young summarizes it aptly: “Bitcoin’s future growth depends on ETFs, institutions and governments, not retail traders. If altcoins are to grow, they must adapt to this new reality.”
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