Over the past weeks, the altcoins’ season (or the altseason) seems to be the biggest narrative in the digital asset market, leading virtually all conversations amongst the crypto crowd. This narrative is beginning to feel even more organic due to the strong performances of the largest altcoins, ETH and XRP, in recent weeks.
However, the latest on-chain observation points that the altcoin season might only just be warming up and has not kicked in full gear just yet. The altseason, a period when mid/small-cap altcoins outperform BTC, is often marked by capital rotation from the largest cryptocurrency to the rest of the market.
The rationale behind this Darkfost’s theory is based on the performance of various asset classes relative to Bitcoin over the last few months. The analyst compared the market cap growth of Bitcoin, large-cap altcoins (the top 20 largest altcoins), and mid-to-small-cap altcoins by calculating the difference between their 365-day and the 30-day moving average (MAs).
Typically, the difference between the 365-day moving average and the 30-day moving average can be considered an indicator of growth momentum. Rapid market cap growth is witnessed when the short-term moving average (30-day MA) rises faster than the long-term moving average (365-day MA), while a lagging 30-day moving average indicates slow growth momentum.
According to the crypto analyst, this similar performance pattern was seen earlier in the year before the general market experienced a severe downturn. Nevertheless, Darkfost noted that the strongest action, which resembled a “true” altseason, happened back in the first quarter of 2024.
As of this writing, the altcoin market is valued at over $1.55 trillion, reflecting an over 12% increase in the past seven days.
