Glassnode’s Altcoin Cycle signal has returned to the “Altcoin Season” zone. However, the company warns that the sharp decline in the price of Bitcoin (BTC) is driving most of this movement.
In a typical market cycle, the print suggests that altcoins are on the rise while Bitcoin remains strong and continues to attract buyers without controlling all of the market’s liquidity.
Bitcoin weakness boosts altcoin signal
The Altcoin cycle signal moves above 50 when altcoins outperform Bitcoin. It now sits at 86, deep into Altcoin season.
Glassnode said sellers are running out of altcoins after nearly two years of pressure. bitcoin, However, it is trending downward.
“Right now, the Bitcoin side is still doing most of the work,” Glassnode said.
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Data from BeInCrypto Markets showed that Bitcoin has fallen by 18% over the past month. The decline comes as risk assets face pressure from a more hawkish Federal Reserve stance and growing concerns about the possibility of higher interest rates.
Analysts at Bank of America We expect the Fed to raise interest rates three times this year.
Higher interest rates are typically viewed as bearish for risk assets because they increase borrowing costs, tighten financial conditions, and reduce investors’ appetite for speculative investments such as cryptocurrencies.
However, not everyone shares this view. In a recent research note, Zach Bandel, head of research at Grayscale, said the company’s base scenario is for the Fed to refrain from raising interest rates further.
Under this scenario, easing concerns about monetary tightening could support Bitcoin and other digital assets, especially if broader financial markets continue to perform well.
“Bitcoin and gold have underperformed stocks since the start of the Iran War due in part to expectations of Fed monetary policy tightening. But if interest rate hikes become less likely — in line with our base case scenario — Bitcoin will likely catch up with stocks.” Blog He reads.
This distinction is important because Glassnode noted that the current Altcoin season reading is primarily driven by a decline in the price of Bitcoin.
A BTC rebound can help validate the signal by allowing altcoins to outperform alongside a stronger Bitcoin rather than in its absence.
However, a high signal reading does not guarantee a market-wide boom. Experts, including Matt Hogan, chief investment officer at Bitwise, He said the traditional era The altcoin rallies are over.
“I don’t think we will see the kind of rising tide that lifts all the buckets… I think we will see an unconventional altcoin season,” he said.
Cryptoquant CEO Ki Young Joo went further. “Narrative alone is no longer enough” for altcoins, he said. He predicts that altcoins with real revenues and business models will continue.
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this post Glassnode signals Altcoin season while Bitcoin leads the move appeared first on BeInCrypto.
