The "altseason" indicator from Glassnode has gone off the charts, but it's too early to celebrate: Bitcoin is dragging the market down.
The popular Altcoin Cycle Signal indicator from the analytical platform Glassnode has again risen above the critical mark of 50, signaling the onset of "altcoin season." The current index value has reached 86, which formally indicates the dominance of alternative cryptocurrencies over Bitcoin. However, as the analysts themselves note, the reason for this lies not in the organic growth of altcoins, but in the sharp decline of the first cryptocurrency's exchange rate.
Typically, altseason is characterized by a situation where Bitcoin consolidates or grows moderately, attracting liquidity, while altcoins show explosive growth. Now we are seeing a different picture: according to experts, sellers have practically exhausted their potential after two years of intense pressure, but Bitcoin continues to depreciate. Over the past month, BTC has lost 18% in price, which has led to a distortion of the indicator's readings.
Macroeconomic Pressure and Fed Rates
The main blow to the market comes from the macroeconomic backdrop. The tightening rhetoric of the US Federal Reserve System and expectations of further interest rate hikes are putting pressure on all risk assets. Bank of America analysts predict three rate hikes this year, which traditionally drains capital from speculative instruments, 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, in his opinion, Bitcoin could quickly make up for lost ground, especially against the backdrop of positive dynamics in stock markets.
New Altseason: Not for Everyone
The high value of the Glassnode indicator is not yet a guarantee of a universal rally. Many leading experts, including Bitwise's Chief Investment Officer Matt Hougan, believe that the era of "classic" altseasons, when all projects indiscriminately soared in price, is irrevocably gone. We are facing a non-traditional altseason, where only those projects with real revenue, a working business model, and a strong community will survive and show growth. CryptoQuant CEO Ki Young Ju echoes this opinion, emphasizing that for altcoins, "a new story alone is no longer enough."
My analysis: The current signal is more of a "false breakout" or, more precisely, a technical artifact caused by Bitcoin's weakness, not the strength of altcoins. A true altseason will only begin when BTC stabilizes and resumes its growth. Until then, any surge in altcoins will be speculative and short-term in nature. Investors should focus on fundamentally strong projects, rather than chasing "green candles" out of thin air.