Altcoins are currently facing a challenging landscape, as they have been experiencing consistent declines since March. The dominance of bitcoin in the market has further diminished the likelihood of a resurgence in altcoin run-ups. A crypto analyst named Altcoin Sherpa has highlighted two prerequisites for an ‘Altcoin Season’ to emerge.
The crypto market upswing in 2024 has been largely dominated by bitcoin, along with the sectors of artificial intelligence and meme coins. As of press time, the total market capitalization of all crypto assets stands at $2.34 trillion, with bitcoin accounting for 54% of this figure. Ethereum holds a market dominance of about 18.3% this weekend, and alternative digital currencies have suffered more than bitcoin during the recent downward trend. Altcoin Sherpa, who has 217,000 followers on the social media platform X, stated that at least one of two developments must occur to trigger a full-scale altcoin rally.
“In my personal opinion, alt charts still look pretty rekt and I don’t see any strong moves quite yet,” said Sherpa. “Generally speaking, I think we need to see one of two things before a full-on altcoin run.”
The analyst outlined the two possibilities as follows:
1) Final capitulation, which usually involves some sort of last shakeout.
2) Another potential possibility is a longish consolidation period.
The current Altcoin Season Index on blockchaincenter.net indicates that the likelihood of an altcoin season materializing is significantly low. Roughly 27 days ago, Bitcoin.com News reported on the index following the U.S. Securities and Exchange Commission’s approval of several spot ethereum exchange-traded fund (ETF) 19b-4 filings.
At that time, the index had a score of 35 out of 100, with a score of 75 required for the commencement of altcoin season. However, as of June 22, the index score has further declined to 20 out of 100.
Sherpa predicts that once the altcoin season begins, there will be a “face melting rally eventually.” The analyst emphasized that the precise timing remains uncertain but expects higher prices for the majority of altcoins later this year.
As the crypto market continues its complex journey, the prospects for an altcoin season depend on a delicate balance of market factors and investor sentiment. With bitcoin maintaining a strong lead, altcoins must meet stringent criteria to generate significant interest.
What are your thoughts on the analyst’s two prerequisites for an altcoin rally to begin? Feel free to share your opinions in the comments section below.
