Altcoins have seen considerable growth this week, alongside Bitcoin [BTC]. These gains have triggered a surge in the Altcoin Season Index to a two-month high of 45
Altcoins enjoyed substantial gains this week, largely driven by Bitcoin’s [BTC] positive price action. As a result, the Altcoin Season Index, as displayed on Blockchain Center, surged to a two-month high of 45.
However, for an altcoin season to be officially confirmed, this index must reach 75. While this threshold remains unmet, the metric has seen a gradual rise, considering it stood at 18 at the month’s beginning.
This data indicates a shift in sentiment toward altcoins. But for this index to propel past 75, further gains are necessary for altcoins.
Altcoin performance against Bitcoin
The second-largest cryptocurrency, Ethereum [ETH], underperformed against Bitcoin as the ETH/BTC ratio dropped to its lowest level since 2021.
At press time, this ratio had bounced back to above 0.04, indicating slight gains for ETH against Bitcoin. Nonetheless, it remained at yearly lows.
Solana [SOL] was the sole altcoin among the top ten coins to outpace BTC over the past seven days, surging by 12%.
Examining the top 50 performance over the last 90 days also revealed that a majority of altcoins still incurred losses, with AAVE [AAVE] and SUI [SUI] emerging as the top gainers, both rising by more than 50%.
This suggests that altcoins must extend their gains for the market to enter an altcoin season.
DeFi, NFT booms: Ushering in altcoin season?
The decentralized finance (DeFi) and non-fungible token (NFT) industries play a role in shaping altcoin performance. Both industries showcased substantial growth this week.
According to DeFiLlama, the Total Value Locked (TVL) across the DeFi industry rose by over $10 billion in two weeks, reaching $85 billion at press time.
However, there is still room for growth as DeFi activity remains below this year’s highs, which surpassed $100 billion.
DeFi activity over the past seven days. Source: DeFiLlama
The NFT space also experienced growth as NFT sales volumes rose by over 40% at press time, according to CryptoSlam.
While these factors build a case for an altcoin season, Bitcoin’s dominance remained at high levels. According to Coinstats, BTC currently commands 54% of the cryptocurrency market.
The rise in BTC’s dominance could be attributed to Ether’s underperformance, with the largest altcoin’s dominance shrinking from 18% in early 2024 to 14% at press time.
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