Renowned cryptocurrency educator and analyst Er Chongjiu asks a question no one wants to hear. He backed up his claims with various data and posed the question: “What if altcoin season doesn’t come?”
Altcoin season is an informal term that describes a period when investing in altcoins brings better returns than putting money into Bitcoin (BTC).
Analyst Explains Delay in Altcoin Season
After the fourth Bitcoin halving, the cryptocurrency market is eagerly awaiting the altcoin season, along with the approval and launch of the Ethereum exchange-traded fund (ETF). This period is usually marked by several significant events.
Firstly, new capital flows into the cryptocurrency market, initially into stablecoins, Bitcoin, or Ethereum, as they are considered more stable than smaller market cap coins. This influx of capital typically triggers market rallies.
However, despite the expectations, the Altcoin Season Index indicates that the cryptocurrency market is still experiencing the dominance of Bitcoin.
Negative Flows in Ethereum ETFs
Duo Nine highlights a concerning scenario where the pathway to the altcoin season has not fully materialized. Negative flows in the Ethereum ETF signal potential trouble for investing solely in altcoins.
The Ethereum ETF has seen negative flows, with investors redeeming their shares in Bitcoin and Ethereum, leading to a net balance of -$460 million.
While the Ethereum ETF market is still new, it’s essential to consider the short-term versus long-term outlook, with potential bullish indicators in the long run.
Bitcoin Dominance and Market Trends
The analyst suggests that the current high Bitcoin dominance indicates a lack of trust in altcoins, given global uncertainties and economic concerns driving investors towards Bitcoin as a safer asset.
Despite this, some investors view high Bitcoin dominance as an opportunity to accumulate undervalued altcoins for long-term potential.
Potential for Altcoin Season
While skepticism surrounds the timing of the altcoin season, analysts are exploring various altcoins with hopes that the delay does not spell their disappearance.
