Altcoin season index plummets from 90 to 60
The drop in the altcoin season index coincides with a broader correction in the cryptocurrency market
The altcoin season index, a key indicator used to gauge investor sentiment in the cryptocurrency market, has plummeted from 90 to 60, signaling a potential end to the recent altcoin rally.
Analysts suggest the decline reflects a shift in investor focus back to Bitcoin (BTC) amid increasing macroeconomic uncertainty and a broader market correction, Coingape informs.
The index, which measures whether altcoins are outperforming Bitcoin, had remained at elevated levels for weeks, pointing to strong interest in assets like Ethereum (ETH), XRP, Cardano (ADA), and Dogecoin (DOGE). However, the latest drop below critical support levels raises caution for altcoin traders, with some analysts flagging risks of an impending selloff.
Broader market correction
The drop in the altcoin season index coincides with a broader correction in the cryptocurrency market. Bitcoin’s price recently fell below $105,000, while major altcoins posted even steeper losses. Ethereum, XRP, and ADA all experienced notable declines, signaling a potential loss of momentum in the altcoin sector.
Market observers point to macroeconomic factors, including concerns over interest rate policies and shifting liquidity conditions, as reasons behind the growing preference for Bitcoin. As a perceived “safe haven” in the crypto ecosystem, Bitcoin often benefits during periods of heightened market volatility, drawing capital away from higher-risk altcoins.
What’s next for altcoins?
The decline in the altcoin season index may serve as an early warning sign for investors, indicating the possibility of further selloffs in the altcoin market. Some analysts believe the shift back toward Bitcoin reflects a broader trend of risk aversion as traders look to secure gains amid uncertain market conditions.
Looking ahead, market participants will closely monitor Bitcoin’s price movement and its dominance relative to altcoins. If the index continues to fall, it could confirm a deeper correction for altcoins while reinforcing Bitcoin’s position as the primary driver of the crypto market.
Earlier we wrote Altcoins update ATH: BGB, GT and EIGEN winners of the day.
