The Glassnode indicator recorded an "altcoin season": the signal turned out to be false.
The analytical indicator Altcoin Cycle Signal from Glassnode has once again crossed the threshold of 50 points, formally indicating the onset of an "altcoin season." The indicator is currently at 86, which typically signals that altcoins are significantly outperforming bitcoin. However, it turns out that the current rise in the index is due not to the strength of alternative coins, but to the weakness of bitcoin itself.
In the classic scenario, an "altcoin season" implies that altcoins are actively rising while bitcoin consolidates, retaining buyers and attracting liquidity. Today, we see the opposite picture: bitcoin has lost 18% of its value over the past month amid the hawkish monetary policy of the US Federal Reserve and market fears of possible rate hikes. It is this decline in the leading cryptocurrency that has led to a sharp rise in the index, as its denominator—the price of BTC—has decreased.
Glassnode experts emphasize that sellers of altcoins have nearly dried up after two years of aggressive pressure. But bitcoin continues to suffer losses. The company noted that "bitcoin is still doing all the heavy lifting," and for a true altcoin season to be confirmed, a reversal in BTC upward is necessary. Only then will the growth of altcoins be sustainable and driven by their own strength, rather than the weakness of the flagship asset.
Macroeconomic Background and Forecasts
The main catalyst for the current correction in bitcoin has been the hawkish stance of the Federal Reserve. Bank of America expects three rate hikes this year, which traditionally puts pressure on risk assets, including cryptocurrencies. However, not everyone shares this pessimistic scenario. Grayscale's Head of Research, Zach Pandl, believes that the Fed will refrain from further hikes. In this case, easing concerns could support bitcoin and other digital assets, especially if global stock markets maintain positive momentum.
Notably, even with a formal signal of an "altcoin season," many experts doubt a repeat of classic rallies. Bitwise's Chief Investment Officer, Matt Hougan, believes that the era of universal growth for all altcoins is over. CryptoQuant CEO Ki Young Ju adds that projects now need more than just a good story—only those with real revenue and a working business model will survive.
My analysis: The current Altcoin Cycle Signal is more of a "bearish" indicator for bitcoin than a "bullish" one for altcoins. Until BTC stabilizes and begins to recover, any altcoin rally will be speculative and short-term in nature. Investors should be extremely cautious and not confuse a formal signal with a fundamental change in market structure.