Altcoin Season: Glassnode indicator sends an alarm signal amid Bitcoin's decline
Glassnode's Altcoin Cycle Signal indicator has reactivated the "altcoin season" phase. However, analysts emphasize that this is not due to the strengthening of alternative coins, but rather the sharp decline of Bitcoin (BTC).
Traditionally, the signal for the start of an "altseason" is recorded when altcoins show confident growth and Bitcoin stabilizes, attracting buyers without siphoning off all the liquidity. Currently, the situation is fundamentally different. The indicator's value has surged to 86, formally indicating altcoin dominance. However, as experts note, sellers have almost exhausted their resources after a two-year period of intense pressure, but Bitcoin continues to depreciate.
Bitcoin's Weakness as a Driver of Altseason
According to market data, Bitcoin has lost 18% of its value over the past month. The correction is triggered by the tightening of US Federal Reserve monetary policy and market participants' concerns about maintaining or even raising interest rates. Bank of America forecasts three rate hikes this year. Rising rates traditionally hit risky assets: loans become more expensive, financial conditions tighten, and investor interest in speculative instruments like cryptocurrencies declines.
However, not everyone shares this pessimistic forecast. Grayscale's Head of Research Zach Pandl adheres to a baseline scenario in which the Fed refrains from further hikes. In this case, easing concerns about monetary tightening could support Bitcoin and other digital assets, especially if global financial markets maintain positive momentum.
"Bitcoin and gold have shown weaker performance compared to stocks since the start of the Iran conflict — partly due to expectations of Fed policy tightening. However, if the likelihood of rate hikes decreases, which is our baseline scenario, Bitcoin could catch up with stocks," the company's blog notes.
The Reality of Altseason: Not So Clear-Cut
Glassnode emphasizes that the current Altcoin Season reading is largely explained by the decline in the leading cryptocurrency's price. A recovery in BTC could confirm the signal: then altcoins would grow alongside a strong Bitcoin, not just amid its weakness.
High indicator values do not necessarily mean widespread growth. Experts, including Bitwise Chief Investment Officer Matt Hougan, believe the era of classic altcoin rallies is over. "I don't think we'll see the usual rise of all assets together. Rather, we are facing an unconventional altcoin season," he stated. CryptoQuant CEO Ki Young Ju adds that for altcoins, "a new story alone is no longer enough." Only projects with real revenue and a working business model will survive.
My analysis: The current signal is not so much the start of a full-fledged altseason as a reflection of Bitcoin's structural weakness. The market is transitioning to a phase where altcoin survival will be determined not by a general "rising tide," but by the fundamental value of projects. Investors should be extremely selective and not count on a total rise of all alternative coins.