Understanding the Reasons Behind the Delay of the Altcoin Season

The dominance of Bitcoin, represented by BTC.D, is an important metric for determining the altcoin season. When BTC.D falls, it often means that investors are shifting their investments towards altcoins during a volatile market period. Despite concerns about macroeconomic factors such as the upcoming FOMC meeting and the retaliatory tariffs imposed by Trump set for April 2, Bitcoin's dominance remains strong. Currently, it stands at 61.6%, slightly down from the peak of 64.3% in February. Switch to altcoin with medium or low market capitalization A detailed examination of the weekly price increases of cryptocurrencies shows that four out of five of these coins are mid-cap or low-cap altcoins. This trend suggests that investors are moving away from large-cap coins and towards cheaper, higher-risk alternatives. Traditionally, the dominance of Bitcoin is an important indicator for the altcoin season. When BTC.D rises, it usually means that investors are shifting their money into Bitcoin for safety. However, the current scenario seems different. Notably, the risks associated with Bitcoin are higher than usual. The Recovery Potential of Bitcoin and the Overload Situation of Altcoin The first quarter did not end as expected, with Bitcoin still below $100,000, disappointing many. Furthermore, no interest rate cuts are expected until at least the end of Q2, leaving the market in a state of anticipation. Despite these conditions, the altcoin season has not yet arrived. Even with the stability of Bitcoin, the altcoin season index is currently at 29, indicating that 58% of altcoins are performing better than BTC. This percentage mainly consists of low to mid-cap coins. However, this figure is still significantly lower than the 75% threshold typically required to start a real altcoin season. One of the important factors affecting this cycle is the emergence of Bitcoin ETFs. Right before Bitcoin reached its all-time high of $109,000 in January, Bitcoin ETFs witnessed $1.078 billion in inflows. Since then, millions of dollars have been invested in these ETFs, keeping investment capital in BTC and delaying the typical altcoin season. Has the Altcoin Season Ended? As of March 18, CoinMarketCap has listed over 12.88 million digital assets, a significant increase from 11 million in February. This increase, primarily from memecoins and low-cap tokens, is reducing the concentration of investors. While Bitcoin's dominance continues to delay the altcoin season, investors are turning to higher-risk alternatives. Many tokens currently have market capitalizations ranging from $10,000 to $100,000, tying capital into short-term assets. This situation is putting pressure on top large-cap coins. For example, the once-strong ETH/BTC pair has now dropped to a five-year low. With the emergence of new tokens and the rise of ETFs, the market is undergoing significant changes. The typical flow of capital from Bitcoin to altcoin seems to be falling, leaving Bitcoin firmly holding its ground in the market.