- Bitcoin ETF’s strong inflows could trigger the next upward price move.
- Altcoins could follow BTC’s gains but could soon struggle to outperform the king.
Bitcoin [BTC] could soon escape from his stupor. Early this week, the price stood at $67.7k, and the lack of trading volume and speculative interest suggested that BTC was not ready for a strong uptrend.
This has started to shift in the last 24 hours. Data from Farside Investors showed that Bitcoin exchange traded funds saw an inflow of $886 million on Tuesday, June 4.
This level of buying could spark a change and spur speculators and investors into action.
Will the increased attention on Bitcoin cause altco prices to explode? Or will altcoin season have to wait? Here are the findings of the altcoin seasonal indicator.
How close are we to altcoin season?
The altcoin seasonal index showed a value of 31, according to data from BlockchainCentre. The index has fallen from 80 to 31 in the past six months.
A year ago, the index showed a strong BTC season.
However, that was during the depths of the bear market, when Bitcoin was trading at $25,000 and alts were in a prolonged downtrend or consolidation phase.
At the time of writing, even though alts may perform well due to Bitcoin’s bullish enthusiasm, only a few select alts could outperform Bitcoin.
If the altcoin seasonal indicator can rise above 75, it would be a sign of wild bullishness in the altcoin ecosystem.
Given that there are many more alts at the moment compared to previous cycles, gains during an altseason could still be concentrated within a subset of alts rather than market-wide rallies.
Bitcoin’s range-bound dominance and past parallels
Source: BTC.D on TradingView
The Bitcoin Dominance chart represents the BTC market cap as a percentage of the total crypto market cap. The benchmark has been between 53.9% and 56.3% since April.
At the time of writing, it was recovering from range lows. An increase in BTC.D means that BTC is growing faster than the rest of the market, Ethereum [ETH] included.
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In 2021, from January to June, BTC dominance dropped from 72% to 40.4%. In this window, the altcoin market cap (excluding ETH) grew from $122 billion to $934 billion.
Therefore, a strong downtrend in the BTC.D chart is necessary for a real altcoin season to begin.