- Bitcoin’s market cap growth continues to outperform altcoins, delaying the start of a traditional altcoin season.
- Analyst Darkfrost highlights that current moving averages show no momentum shift in favor of altcoins.
- Ali Martinez cites oversaturation as a major barrier to any potential altseason.
As is often the case when the bull cycle is about to end, the discussions of when the altcoin season would start dominated the crypto space last quarter. In previous cycles, investors move funds to other cryptocurrencies from Bitcoin (BTC) to enjoy maximum profits before the start of the bear market.
However, the performance of the altcoins this year has differed from the norm. Investors haven’t moved funds to large-cap altcoins like they have done in the past. Instead, Bitcoin continues to outperform all other cryptocurrencies.
Is It Right to Invest in Altcoins Now?
In a recent X post, anonymous analyst Darkfrost used current data to explain his views about the performance of the leading crypto asset compared to the altcoins. Darkfrost stated that the growth in market capitalization for BTC remains on the rise compared to altcoins.
Darkfrost based their calculation on the difference between the 30-day and 365-day moving averages (MAs) for the top 20 altcoins and Bitcoin. The analyst explained that the difference between these two moving averages shows their growth momentum.
Usually, when the short-term MA (30-day MA in this case) dips lower than the long-term MA (the 365-day MA in this case), it suggests a decline in market cap growth. However, the reverse is true when the 30-day MA rises faster than the 365-day MA.
BTC vs altcoins chart. Source: X @Darkfrost_Coc
Based on this chart shared by Darkfrost, Bitcoin’s market cap growth has been higher than the altcoins. The difference in market cap growth between them is now at a level that occurred in October 2023.
That time, there was a short altcoin rally before a subsequent BTC dominance. The anonymous analyst added that a sign of a strong correction would be when this growth ratio turns negative.
Hence, the analyst noted that there are no current market conditions that signify when the altcoin season would begin.
Many Tokens, Little Demand
Earlier this year, another popular crypto market analyst, Ali Martinez, stated that the altcoin season might never happen this cycle due to the huge number of tokens available in the market. Martinez tweeted that there are nearly 36.5 million altcoins currently in the market.
This number is significantly higher than the 3,000 altcoins available when the 2017-18 altseason occurred and even much lower than the 500 altcoins during the 2013-14 altcoin season.
Token Supply with Time. Source: X @ali_charts
