Crypto Market : Stablecoin Liquidity Now Key to Upcoming Altcoin Season

Crypto Market- Institutional Capital and Stablecoin Liquidity Point to Imminent Altcoin Boom

Crypto Market– The cryptocurrency market is on the brink of a highly anticipated altcoin season (altseason), a time when altcoins historically outperform Bitcoin. However, according to market analyst Ki Young Ju, the factors determining the start of this altcoin surge have evolved.

Stablecoin Liquidity to Drive Altseason

In a recent post on X (formerly Twitter), Ki Young Ju, CEO of CryptoQuant, shared insights into the changing dynamics of the crypto market. He emphasized that traditional indicators signaling the beginning of altcoin season, such as asset rotation from Bitcoin to altcoins, are now outdated. Rather than capital flowing from Bitcoin into altcoins, the new marker for altseason is the increase in altcoin trading volume against stablecoin and fiat currency pairs.

Ki pointed out that despite recent price increases in Ether (ETH), altcoin trading volume on Bitcoin pairs has remained relatively low. In contrast, the trading volume of altcoins paired with stablecoins has surged, aligning with the rise in ETH’s price. This shift reflects “real market growth,” driven by the liquidity and stability provided by stablecoins, rather than simple asset rotation between Bitcoin and altcoins.

Stablecoin Liquidity Changing Market Dynamics

According to Ki, stablecoin liquidity is now a better indicator of altcoin market movements. The increasing liquidity of stablecoins is seen as a key factor behind the growth of altcoin markets, highlighting a more sustainable and deeper evolution in the crypto space. This shift is a departure from previous cycles, where Bitcoin’s dominance dictated market movements.

Unlike earlier bull markets, which were largely driven by retail capital, the current bull run is mainly being fueled by institutional investments, particularly through spot Bitcoin exchange-traded funds (ETFs). Ki added that the market capitalization of all cryptocurrencies, excluding Bitcoin, still lags behind its all-time high, signaling that fresh capital from new users on exchanges is relatively low.

Altseason Is Approaching

The indicators for altseason are becoming increasingly clear. The altcoin season index, which tracks the performance of the top 50 coins over the past 90 days, shows that 73% of these altcoins have outperformed Bitcoin during this period. This figure is rapidly approaching the 75% threshold that marks the start of an official altcoin season.

With several top-cap altcoins nearing their all-time highs and Bitcoin’s price remaining below $100,000, the market is set for a potential altcoin rally. Experts advise keeping an eye on stablecoin liquidity and the Bitcoin dominance index, both of which are crucial signals for when altseason could truly begin.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.