Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has released a joint report with Block Scholes analysing the factors delaying the much-anticipated altcoin boom. Titled “Altcoin Rotation — Why Altseason Hasn’t Come This Time?”, the report delves into the unique market patterns and the broader forces affecting the cryptocurrency landscape, providing insights into why traditional altcoin behaviour has deviated in the current cycle.
The term “altseason” refers to a period when altcoins—cryptocurrencies other than Bitcoin (BTC) and Ethereum (ETH)—experience rapid growth, often seeing market capitalisations surge by 6x to 7x. However, as detailed in the report, many traders are finding that their expectations of such explosive growth are not being met, and the timing of the altcoin rally has not materialised as anticipated.
The research points to a departure from historical trends, with Bitcoin continuing to dominate the market even after hitting several all-time highs. This ongoing dominance of BTC, the report argues, is in stark contrast to previous cycles where altcoins typically surged after BTC’s rise. Historically, altseasons have followed a pattern where, after BTC reaches new highs, capital flows into niche altcoins, fuelling significant growth. However, this has not been the case in the current cycle.
The report suggests that the performance of BTC, which has not slowed down even after the halving event in April 2024, points to a structural shift in market dynamics. Unlike in previous cycles, where halvings have led to a slowdown in BTC’s growth, this time, BTC has remained resilient, keeping dominance over alternative cryptocurrencies.
Several factors are identified as contributing to this deviation from traditional patterns. Among them are the market’s reaction to BTC halvings, the DeFi (decentralised finance) summer of 2020, and the increasing institutional capital inflows triggered by ETF investments. Additionally, the rise of stablecoins has played a role in shifting investor interest, creating a more complex landscape for altcoins to navigate.
The report also outlines potential catalysts that could lead to a future altcoin boom. One scenario involves BTC holders taking profits at new all-time highs and redirecting their capital into altcoins, a typical trend seen in past altseasons. Another key factor is Ethereum’s performance: if ETH were to outperform BTC, it could ignite greater interest in alternative cryptocurrencies, much like earlier market cycles. Furthermore, the growing interest from institutional investors, coupled with retail enthusiasm for meme coins, could contribute to the next altseason.
Bybit and Block Scholes’ comprehensive analysis also notes the evolving regulatory environment and its potential to impact the crypto market. As more regulations are implemented, institutional investors may become more comfortable entering the market, potentially leading to a new phase of growth for altcoins.
For more information and access to the full report, visit Bybit Learn.
