Altcoins Surge Following Bitcoin...Has Alt Season Begun?

▲ Altcoin

Bitcoin (BTC) temporarily surpassed $82,000 and approached $83,000, a level not seen since late January. Simultaneously, expectations for an altcoin season have resurfaced. Bitcoin's bullish momentum has spread to some altcoins that had been sidelined for a long time, stimulating a recovery in market sentiment.

CryptoPotato reported on May 6, citing data from on-chain analytics firm Santiment, that after Bitcoin surpassed $81,700, Toncoin (TON), Internet Computer (ICP), Cardano (ADA), SUI, ONDO, and Hyperliquid (HYPE) showed upward momentum in the early part of the week.

Santiment stated, "Whispers of a light altcoin season are beginning to emerge," adding, "As Bitcoin climbed above $81,700, profits have started to trickle into projects that have been dormant for a long time."

According to Santiment's internal screener, Internet Computer rose by up to 17% in a day, and Toncoin by 16%. ONDO and Cardano showed moderate gains of around 5%. As of the 7th, ONDO rose approximately 23%, Internet Computer 16%, and Dogecoin (DOGE) about 15%.

One of the largest gainers was Zcash (ZEC). According to CoinGecko data, Zcash surged approximately 40% in the last 24 hours and 76% over the past 7 days. As the altcoin rally concentrated on certain assets, the possibility of short-term rotation emerged as a key market issue.

Analyst Darkfost stated that TOTAL3, which tracks the market capitalization of altcoins excluding Bitcoin and Ethereum (ETH), rose approximately 15% from its February low. He explained that the proportion of alternative cryptocurrencies listed on Binance that have recovered their 200-day moving average increased from 2.3% in early February to 11.7% currently, calling this an "early sign of recovery."

Trading volume indicators also improved. The proportion of altcoin trading volume on Binance relative to the combined trading volume of Bitcoin and Ethereum increased from 31% to 49% over the past two months. This shows expanding market participation in altcoins, even amidst a Bitcoin-led market.

However, a full-fledged altcoin season is still some way off. According to CoinGecko, Bitcoin's dominance remains around 58.6%, and CoinGlass's Altcoin Season Index stands at 40 out of 100 points. This index measures the number of top 100 tokens that have outperformed Bitcoin over the past 90 days, and an altcoin season is confirmed when the score exceeds 75.

Interest in altcoins is also more of a selective trend than a widespread one. CryptoPotato reported that current investor interest is focused on certain themes that have been neglected for several months, such as artificial intelligence, DeFi, and older Layer 1 networks. Darkfost described the current altcoin recovery as "moderate" but added, "Such changes may precede a more distinct rotation phase within the market."

Bitcoin's break above $82,000 injected short-term vitality into the altcoin market, but market leadership still remains with Bitcoin. While altcoin trading volume recovery and surges in some assets occurred simultaneously, a full altcoin season entry has not yet been confirmed by indicators.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*