CoinMarketCap Altcoin Season Index Suggests Altcoins are Underperforming

The CoinMarketCap Altcoin Season Index has dipped below 40, indicating that altcoins are currently underperforming relative to Bitcoin. This index helps determine whether the market is in altcoin season or Bitcoin season by tracking the performance of the top 100 cryptocurrencies over the past 90 days.

What does the Index mean?

When 75% or more of these altcoins outperform Bitcoin, the market is considered to be in altcoin season. However, with the index currently standing at 36, it’s clear that Bitcoin is leading the market.

Despite the continuous market volatility, Bitcoin has demonstrated significant strength, staying above $96,000. The direction of the larger market may be determined by Bitcoin’s next action.

Analyst Predicts Bearish Trend for Bitcoin

Maartunn, an analyst with CryptoQuant, points out that the Inter-exchange Flow Pulse (IFP) indicator is signaling a bearish trend. This metric tracks Bitcoin’s movement between derivatives and spot markets.

“The Inter-exchange Flow Pulse (IFP) indicator has turned bearish, suggesting that Bitcoin could face further resistance before a breakout.”

Altcoins Face Challenges

Altcoins have had difficulty gaining traction, perhaps due to the increasing number of fresh launches. Liquidity tends to be spread thin when there are too many new products entering the market.

Bobby Ong, co-founder of CoinGecko, released data showing that over 600,000 tokens were created in January alone. This oversaturation of new tokens may be causing altcoin performance to suffer.

Top-Performing Altcoins

Despite the challenges, some altcoins have shown significant growth. Hyperliquid and Ripple are among the best-performing altcoins in the past 90 days, rising 735% and 143% respectively.

Tips for Investors

When investing in altcoins, consider the following:

  • Keep an eye on market trends and adjust your strategy accordingly.
  • Diversify your portfolio to minimize risk.
  • Stay informed about regulatory developments and macroeconomic factors that may impact the market.

Historically, altcoin season typically follows Bitcoin’s consolidation or decline. The next big rise for altcoins will be determined in large part by macroeconomic factors, regulatory developments, and general market conditions.

For more news and updates on the world of cryptocurrencies, visit Global Crypto News.

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