Whales Are Positioning Themselves for the Next Altcoin Season, Will This Time Be Different?

There’s another round of Alt season calls right at the beginning of August, just weeks away from a potential first Fed rate cut in September.

Several market analysts are anticipating the arrival of alt season, a period characterized by a surge in altcoin prices. CryptoQuant, a crypto data intelligence platform, has recently issued a call for the next altcoin season.

According to Ki Young Ju, the founder of CryptoQuant, whales, or smart money, are making significant preparations for the upcoming altcoin season.

Ju’s analysis is based on the 1-year Cumulative Buy/Sell Quote Volume Difference for Altcoins metric, which tracks institutional demand for altcoins.

The metric showcases the difference between the total bid volume and the total ask volume for altcoins on major exchanges, excluding Bitcoin. A positive value indicates higher demand from institutions.

The attached chart displays a rising trend in the metric, suggesting increasing demand from whales for altcoins.

Another perspective on the alt season outlook comes from SwissBlock, a crypto market insight firm founded by the creators of Glassnode.

Their analysis highlights a striking similarity between the current altcoin market and the trend observed in late 2020 and early 2021, which ultimately led to a 400% rally for altcoins.

This analysis is based on the correlation between US Small Cap (Mini Russell 2000 Index Futures) and the total altcoin market cap. Notably, other analysts, such as Quinn Thompson of Lekker Capital, have also pointed out the positive correlation between Small Caps and crypto.

However, not all analysts are convinced by the alt season narrative.

Benjamin Cowen, a renowned crypto analyst, presents a contrasting view, suggesting that the market may not be fully prepared for alt season.

Cowen’s analysis indicates a possible rise in Bitcoin dominance, which could reach 60% by the end of the year. This trend may limit the potential for altcoin price surges.

"You can see that #BTC dominance continues to slowly go higher, despite proclamations just about every week for “alt season”

Cowen further notes that the ALT/BTC ratio may decline, exposing altcoins to greater risk. According to Cowen, a similar trend was observed in 2019, about a month before the Fed rate cut, and may be setting the stage for a potential shift.

"If you look at the total altcoin market cap vs BTC (common way to measure "alt season"), you can see that ALTS/BTC has dropped lower.

In summary, while several market analysts are anticipating alt season, there are varying perspectives and metrics being considered.

The Altcoin Season Index, which measures the market's relative preference for altcoins over Bitcoin, currently indicates a reading of 22 out of 100, suggesting that the market is still largely in Bitcoin season.

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