- The Altcoin Season Index hit a two-month high above 45, suggesting altcoins are surging
- However, this metric must reach 75 to confirm an alternate season.
Altcoins have seen significant growth this week, alongside Bitcoin (BTC). TThose gains triggered a surge in the Altcoin Season Index to a two-month high of 45, as tracked by the Blockchain Center.
However, this index must reach 75 for an altcoin season to be confirmed. Although this has not happened yet, the metric has been gradually rising, given that at the beginning 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 rise above 75, altcoins need to extend their gains.
Altcoin Performance vs. Bitcoin
Ethereum (ETH), the largest altcoin, has been underperforming against Bitcoin as the ETH/BTC ratio has recently abandoned at the lowest level since 2021.
This ratio had bounced back above 0.04 at press time, showing that ETH has made slight gains against Bitcoin. However, it remains at its yearly low.
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 increasing by 12%.
A look at the top 50’s performance over the past 90 days also shows that a majority of altcoins are still in the red, with the biggest gainers being (AAVE) And HERE (HERE)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 the rise of DeFi and NFTs mark the start of altcoin season?
The decentralized finance (DeFi) and non-fungible token (NFT) sectors play a significant role in the performance of altcoins. Both sectors saw significant growth this week.
By DefiLlamaTotal value locked (TVL) across the entire DeFi sector has increased by over $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 of over $100 billion.
Source: DeFiLlama
The NFT space has also seen growth as at press time, NFT sales volumes have increased by over 40%, as shown by CryptoSlam.
While these factors argue for an altcoin season, Bitcoin dominance remains at high levels. Bitcoin currently controls 54% of the cryptocurrency market by Coin Statistics.
The increase in BTC dominance could be attributed to Ether’s underperformance, with the largest altcoin’s dominance dropping from 18% in early 2024 to 14% at the time of publication.
