Viewpoint: The山寨 market is approaching momentum bottom
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Viewpoint: The山寨 market is approaching momentum bottom
Although signs of a山寨 season are beginning to emerge, it may still be too early to make a judgment.
Navigating Web3 tides with focused insightsBy: Nancy Lubale
Translated by: Deng Tong, Jinse Finance
Cryptocurrency analysts say the altcoin market has been in a downtrend over the past two weeks, but one key metric suggests this recent decline may signal a "relative momentum bottom," potentially setting the stage for a "coordinated takeoff" if history repeats itself.
Jamie Coutts, Chief Cryptocurrency Analyst at Real Vision, said the top 200 equal-weighted crypto index "remains in a downtrend, but the altseason indicator shows the recent drop to 10% is likely a relative momentum bottom."
The top 200 equal-weighted cryptocurrency index is designed to track the performance of the top 200 cryptocurrencies by market cap relative to Bitcoin.
Coutts shared the chart below showing the index continuing its downward trend while the altseason indicator hit a low of 10%. This means "only 10% of the top 200 coins outperformed BTC over the past 90 days," the analyst explained.
Historically, such levels have marked market bottoms, followed by sustained rallies in altcoins.
"Before we see a coordinated takeoff, altcoins may still fluctuate around these levels for some time, though many are already building solid foundations," he added.
Top 200 Equal-Weighted Crypto Index vs. Daily Active Users (DAU) vs. Altseason Indicator
Source: Jamie Coutts
Coutts also considered another metric across the broader cryptocurrency market—daily active user (DAU) counts—to support his outlook on the altcoin market.
DAU is a metric reflecting the number of unique public addresses conducting transactions on blockchains each day.
Coutts noted that DAU across all blockchains has grown 97% year-to-date, indicating that "growth momentum remains strong."
He said more users mean higher transaction fees, which in turn signals "rising asset prices."
Prominent crypto analyst Moustache wrote on July 15: "I believe some altcoins are ready for a second wave," adding that the highly anticipated launch of spot Ethereum ETFs could provide the needed catalyst.
In a previous post, Moustache shared the following chart showing altcoin market capitalization repeating a pattern similar to 2020 before entering what he called "the strongest leg of the bull run."
Source: Moustache
It's Still Bitcoin Season
The Bitcoin dominance chart—which measures BTC's market share relative to the entire cryptocurrency market—is one of the most commonly used indicators to gauge whether an altseason has begun. It provides traders insight into overall investor sentiment and risk appetite in the market.
The indicator has been trending upward since the beginning of 2024, reaching a three-year high of 56.5% on April 13. At the time of writing, Bitcoin dominance stands at 54%, suggesting it is still Bitcoin season.
Bitcoin Market Dominance
Source: TradingView
This means altcoins continue to underperform Bitcoin.
According to data from Blockchain Center, only 37% of the top 50 altcoins have outperformed BTC over the past three months. While this is a positive sign, it's not enough to declare the arrival of altseason. For altseason to be confirmed, this percentage must exceed 75%.
Altseason Index
Source: Blockchain Center
This implies that although signs of an emerging altseason are starting to converge, it may still be too early to make a definitive call.
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