When will the next altcoin season start based on on-chain data?
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When will the next altcoin season start based on on-chain data?
The anticipated meme season might require a bit more patience, but what's coming will eventually arrive.
Navigating Web3 tides with focused insightsAuthor: Murphy, On-chain Data Analyst
On-Chain Data Evaluation Model — Altseason
One day while I was in class, Xiao Chi (@FC_0X0) messaged me on WeChat saying: "There's a data point—the divergence between total stablecoin inflows into exchanges and the USD value of BTC withdrawn from exchanges. The remaining potential buying power might have a direct correlation with altcoin volatility. Can we use this logic to identify timing for the start of altseason?"
Interestingly, my lecture materials also mentioned data observations regarding the potential conditions for "capital overflow," which coincided with the launch timing of certain large-cap altcoins. At that time, it was just a rough outline—I vaguely sensed there were some overlooked aspects...
After returning, I organized the data and, inspired by Xiao Chi’s suggestion, redeveloped a set of visual indicators effective for judging the onset of "altseason." Below is my thought process:
Altseason Condition 1: Capital Overflow Assessment
(Figure 1)
In Figure 1, green bars indicate whether the total stablecoin inflow into exchanges over the past 30 days exceeds the USD value of BTC withdrawn from exchanges. If so, these funds may go beyond just purchasing BTC and potentially spill over into altcoins. The higher the green bar, the greater the theoretical overflow value, increasing the likelihood of altseason initiation.
Data shows that the largest theoretical overflow occurred during two periods: October 2023–March 2024 and November 2024–December 2024, indicating a higher probability of altseason during these windows. There was also a brief period between August and September, but both scale and duration were inferior, resulting in weaker impact.
Altseason Condition 2: Capital Inflows into Major Assets
(Figure 2)
Historically, BTC often leads overall crypto market sentiment, followed by investor confidence shifting to other large-cap major coins, and finally tilting further toward alts. A tool to visualize this capital rotation is the 30-day change in realized market cap of BTC and ETH, along with total stablecoin supply (as shown in Figure 2). When all three major assets simultaneously experience net capital inflow, it signals rising market enthusiasm and increased risk appetite—another macro-level prerequisite for altseason.
Data indicates concurrent net capital inflows across all three major assets during October 2023–August 2024 and October 2024–December 2024, peaking in March 2024 and December 2024—so far the most FOMO-driven phases of this cycle.
Altseason Condition 3: Positive Momentum in Altcoin Market Cap Dispersion
(Figure 3)
A third condition is required to determine the start of altseason: isolating positive momentum within altcoin market cap dispersion. We look for periods when the 7D SMA of total altcoin valuation exceeds its 30D SMA. This reflects short-term valuation expansion in alts and rapidly increasing liquidity flowing into them.
In Figure 3, the red line represents the 7D average, and the blue line the 30D average. Data shows the red line crossing above the blue during October 2023–April 2024 and November 2024–December 2024, indicating liquidity beginning to tilt toward altcoins, marking a shift into positive momentum growth for altcoin market caps.
Summary
The above three conditions offer different perspectives: Condition 1 reflects the possibility of capital overflow; Condition 2 reflects overall market sentiment and risk appetite; Condition 3 reflects liquidity skew. When all are met simultaneously, altseason is highly likely underway.
Currently, only Condition 2 is satisfied, while Conditions 1 and 3 are not. This suggests the foundation for altseason exists, but liquidity remains concentrated in major assets—especially BTC—and there isn't significant spillover into altcoins yet.
However, we can observe that the "negative overflow" in Condition 1 is gradually narrowing—an encouraging sign. While the much-anticipated altseason may require a bit more patience, it will come when the time is right.
The content shared here is for informational and research purposes only and does not constitute investment advice.
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