Key facts
- Glassnode's Altcoin Cycle Signal, which measures altcoin outperformance against Bitcoin, has reached 86.
- The signal indicates altcoins are outperforming Bitcoin not due to their own rallies, but because Bitcoin is experiencing a steeper decline.
- Bitcoin's price has fallen back toward $63,600.
- Altcoins have shown relative stability after a prolonged period of declines.
- A genuine altcoin season is characterized by capital rotation into smaller tokens, leading to their price increases.
A key indicator known as Glassnode's Altcoin Cycle Signal has recently flipped to signal an 'altcoin season.' However, this development is not driven by a surge in altcoin prices, but rather by Bitcoin's significant slide. The signal, which reads above 50 when alternative cryptocurrencies (alts) outperform Bitcoin, has climbed to 86. This means alts are performing better on a relative basis because Bitcoin is falling at a faster rate.
According to Glassnode, this situation occurs when alts have run out of sellers and have steadied after nearly two years of declines, while Bitcoin experiences a sharp drop. This is described as a 'hollow' version of an altcoin season, where the signal reflects Bitcoin's weakness rather than genuine demand for other cryptocurrencies. A true altcoin season typically involves capital rotating into smaller tokens, leading to their price appreciation.