Altcoin
Are Ethereum ETFs the trigger for altcoin season? The experts intervene!
- ETH/BTC rallied higher as analysts predict an altseason may be likely.
- However, the altcoin market has shown variable performance and may not recover smoothly.
Altcoin season calls have increased recently, and the Ethereum [ETH] ETFs have stepped up in demand. As the leader in the altcoin market, ETH’s rise denotes the barometer of the altcoin season according to most analysts.
According to Crypto Nova, a pseudonymous crypto analyst, the ETH/BTC ratio was about to increase to blow up and would rally the altcoins.
“When ETH/BTC went up, so did the entire altcoin market. And it looks like that will happen very soon.”
Another analyst, Michael van de Poppe, he echoed Nova’s projection and stated:
“As long as #Ethereum remains above 0.05 BTC, a new trend has begun: up.”
Source: X/de Poppe
For those unfamiliar, ETH/BTC tracks the performance of ETH versus BTC. At the time of writing, the ETH/BTC ratio stood at 0.055, meaning one ETH was worth approximately 0.055 BTC.
An increase in the value of the ratio will suggest a positive performance of ETH and possibly an altcoin season. However, a decline in value will indicate an underperformance of ETH compared to BTC.
The ETH/BTC ratio increased due to speculation on the ETH ETF. The value could increase if the spot ETH ETF launches and begins trading, giving a boost to the rest of the altcoin market.
Altseason hadn’t arrived yet
However, another key indicator of the alt-season, the Seasonal Altcoin Index, had a reading of 37, signaling that the season had not yet begun. Specifically, the Altcoin Season Index signals an altseason if 75% of altcoins have outperformed BTC in the last 90 days.
However, it is worth noting that some altcoins have performed exemplary during the bull phase, while others have struggled.
Meme coins have been outliers, with Pepper [PEPE] consistently printing record highs recently. On year-to-date performance, PEPE is up +950%, and dogwifthat [WIF] it jumped +120% in the same period.
However, other altcoins followed suit, with Ethereum L2s negatively underperforming. According to Deribit’s recent comment,
“OP, MATIC and ARB decreased by 33%, 26% and 24% respectively. This means that 1 ETH invested in OP at the beginning of the year is worth only 0.4 ETH today. This underperformance is not just due to the ETH ETF, or broader underperformance of altcoins.
The Deribit report mentioned that the oversupply of token unlocks could be one of the reasons for L2’s reduced performance.
”$82 million worth of OP unlocks hit the market; the week before there was almost the same amount of ARB’
On alternative L1s, performance has been mixed with “some L1s are outperforming (TON +197%, NEAR +97%), while others, such as APT and AVAX, are underperforming.”
Therefore, a potential increase in the ETH/BTC ratio may not necessarily boost all altcoins; it could be selective.