Confidence in Bitcoin is taking a hit now that the price remains stuck below $100,000. However, according to investment firm VanEck, the conditions are favorable for an altcoin season, in which smaller crypto coins can surpass Bitcoin. With rising interest in DeFi, NFTs and gaming projects, the focus seems to be shifting to the altcoin market.
Altcoin season officially started, according to VanEck
Bitcoin, the largest cryptocurrency, has struggled to hold the $100,000 mark, recently falling to a low of $92,500. Although the market fluctuates, investment firm VanEck points out that we are now in altcoin season, a period when altcoins often outperform Bitcoin. This season, according to VanEck, started on November 27 and is supported by increasing risk-seeking sentiment among investors.
Matthew Sigel, head of digital research at VanEck, explains that Bitcoin’s dominance in market capitalization and trading volume often sets the stage for altcoins to overperform. As new capital flows into the crypto market, niches such as decentralized finance (DeFi), gaming and NFTs are particularly benefiting. This leads to wider acceptance and price increases of altcoins.
VanEck points to Artemis’ Altcoin Season Index, which measures how many of the top 50 altcoins surpass Bitcoin in a 90-day period. According to this index, which varies between 0 and 1, an altcoin season starts at a value of 0.6. The index currently stands at 0.8, indicating a clear shift towards altcoin dominance.
Different interpretations of altcoin season
Not everyone agrees with Artemis’s measurement. Platforms such as CoinMarketCap use different criteria and define an altcoin season as a period in which 75% of the top 100 altcoins outperform Bitcoin. By this standard, the index currently stands at 51, but peaked at 87 on December 4.
Despite these differences in definitions, there is growing optimism among investors and analysts that altcoins will surpass Bitcoin. A technical analysis by crypto analyst Captain Faibik seems to confirm this. He noted that Bitcoin dominance recently broke out of a rising wedge pattern, which traditionally signals an altcoin rally.
Outlook for altcoins
With this shift in market sentiment, many investors continue to hope for significant gains in the altcoin market. For now, it appears that Bitcoin cannot fully maintain its strong momentum from 2024, leaving room for altcoins to take the spotlight. However, whether this altcoin season will be as profitable as in previous years remains to be seen.
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Source: https://newsbit.nl/vaneck-altcoinseizoen-is-begonnen-wat-betekent-dit/
