Key Points
- The CoinMarketCap Altcoin Season Index suggests altcoins are underperforming compared to Bitcoin.
- Bitcoin remains strong amidst market volatility, while altcoins struggle due to an influx of new launches.
The CoinMarketCap Altcoin Season Index, which tracks the performance of the top 100 cryptocurrencies, is currently below 40. This indicates that altcoins are not performing as well as Bitcoin.
The index reflects whether the market favors altcoins or Bitcoin by monitoring the performance of leading cryptocurrencies over a 90-day period. When 75% of these altcoins outperform Bitcoin, it’s considered an altcoin season.
Bitcoin’s Dominance
In December 2024, the index reached 64, indicating the beginning of the altcoin season. However, since January, the index has hovered just above 40 and is showing signs of further decline. As of February 17, the index is at 36, suggesting that Bitcoin is currently dominating the market.
Despite market volatility, Bitcoin has shown remarkable resilience, maintaining a value above $96,000. Bitcoin’s next move could dictate the direction of the broader market. However, some analysts, like Maartunn from CryptoQuant, express a different view.
Maartunn notes that the Inter-exchange Flow Pulse (IFP) indicator, which tracks Bitcoin’s movement between derivatives and spot markets, is signaling a bearish trend. A rise in flows into derivatives usually indicates a bullish market, but the current negative signal suggests Bitcoin may face more resistance before a breakout.
Altcoins Underperforming
Altcoins, on the other hand, are struggling, possibly due to the surge of new launches. When too many new products enter the market, liquidity can be spread too thin.
Bobby Ong, co-founder of CoinGecko, revealed that over 600,000 tokens were created in January alone. This could be causing investors to shift their money between various tokens, leading to a dip in altcoin performance.
Despite this, some altcoins like Hyperliquid (HYPE) and Ripple (XRP) have performed well in the past 90 days, rising 735% and 143% respectively. Conversely, several AI tokens have suffered significant losses, despite attracting attention from crypto communities. RENDER (RNDR), Artificial Superintelligence Alliance (FET), and Near Protocol (NEAR) have all declined more than 40% in the past 90 days.
Historically, altcoin season often follows Bitcoin’s consolidation or decline. The future performance of altcoins will largely depend on macroeconomic factors, regulatory changes, and overall market conditions.
