The cryptocurrency market is showing activity in altcoins, but key metrics indicate that the altcoin season has not yet been confirmed.
The Rotation Has Started, but Ethereum Isn’t Leading Yet
The Altcoin Season Index has reached 51, indicating that some altcoins are performing better than Bitcoin. However, for a confirmed altcoin season, the index needs to exceed 75. Bitcoin's dominance has decreased from 65% to 58.9% over the past month, indicating a shift in investments toward altcoins. However, Ethereum's dominance remains at 15%, well below the 2024 peak of 22.5%. This is significant because altcoin seasons generally begin when Ethereum strengthens against BTC.
Open Interest Is Rising, but so Are the Risks
Total open interest in altcoins has reached $47.01 billion, the highest since November 2021. While this suggests growing trader interest, nearly half of this open interest belongs to Ethereum. Despite this, Ethereum's price action has been lackluster, indicating that many positions may be passive. This increases the risk of liquidations in the event of sudden price drops.
Altcoin Season Sentiment Is Building, but It’s Not Peak Yet
Searches for 'Altcoin Season' have increased, but they remain below 2021 levels. The total number of altcoins in the market has significantly increased, so greater search activity is needed to match previous sentiment levels. Traders are optimistic, but market euphoria has yet to manifest. Other metrics, including the Altcoin Season Index, are also far from the necessary level to confirm an altcoin season.
While altcoins are starting to gain popularity and Bitcoin continues to lose market share, it is essential to recognize that confirmation of the altcoin season is currently lacking. Market conditions remain uncertain.
