The "altseason" signal has lit up, but the market is in confusion: Glassnode analysis
Glassnode's Altcoin Cycle Signal indicator has turned the colors of "altcoin season" once again, but the company's analysts warn that the trigger was not a surge in altcoins, but a sharp drop in Bitcoin. This dynamic calls into question the classic interpretation of the signal.
Under normal conditions, the indicator crossing above the 50 mark means that altcoins are beginning to outperform Bitcoin in terms of growth rates, while the market flagship holds its positions, attracting liquidity. However, the current situation is fundamentally different. The index level has already reached 86, which formally indicates the peak of "altseason." But, as experts note, this happened not because of the strength of altcoins, but because of the weakening of BTC.
Bitcoin's Weakness as a Driving Force
According to market data, Bitcoin has lost 18% of its value over the past month. The correction was exacerbated by the hawkish rhetoric of the US Federal Reserve and fears of further interest rate hikes. Sellers, according to observations, have practically exhausted their potential after two years of pressure, but buyers are in no hurry to return yet.
Bank of America analysts predict three rate hikes this year, which traditionally puts pressure on risk assets, including cryptocurrencies. However, not everyone shares this pessimism. 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 could support both Bitcoin and altcoins, especially if global financial markets maintain positive momentum.
"Bitcoin and gold have shown weaker results compared to stocks since the start of the conflict in Iran—partly due to expectations of Fed policy tightening. But if the likelihood of rate hikes decreases, Bitcoin could catch up," notes the Grayscale analytical blog.
Contradictory Signal: What's Next?
Glassnode emphasizes: the current "altseason" signal is largely explained precisely by the decline in the price of the main cryptocurrency. True confirmation will only come when altcoins begin to rise against the backdrop of a strong Bitcoin, not its weakness.
Moreover, many experts, including Bitwise Chief Investment Officer Matt Hougan, believe that the era of classic altcoin rallies is coming to an end. "I don't think we'll see the usual simultaneous growth of all assets. We are facing an unconventional altcoin season," he stated. CryptoQuant CEO Ki Young Ju adds that for altcoins, "a new story is no longer enough." Only projects with real revenue and a working business model will survive.
My expert assessment: The current signal is more of a "false alarm" than a full-fledged start of altseason. The market is in a phase of uncertainty, where BTC's weakness temporarily shifts attention to alts. However, there will be no sustainable rally without confirmation from macroeconomic factors and a return of confidence in Bitcoin. Investors should be selective: only projects with fundamental value will be able to get through this stage.