New data from GlassNode reveals that the global Altcoin market is undergoing one of the sharpest underestimations in history.
Bitcoin (BTC) on the other hand is relatively stable despite volatile price fluctuations. This shows the harsh differences between the largest cryptocurrency and the broader Altcoin sector.
Altcoins face historic devaluation
GlassNode’s latest on-chain newsletter detailed the volatility of the Bitcoin market last week. Macroeconomic conditions, including Trump’s proposed tariffs in Canada, Mexico and China, were listed as driving facts behind it.
These geopolitical tensions have created an environment of uncertainty for investors. Furthermore, the continued strength of the US dollar contributed to a constrained liquidity environment.
Despite these fluctuations, Bitcoin showed relative stability, with a high fluctuation of between $93,000 and $102,000. This generally indicates a horizontal market.
GlassNode’s analysis shows stability was attributed to increased liquidity and greater capital flows, offsetting the momentum of growing assets.
“Even amidst a relatively unstable macro background, more resilience and patient holder presence contribute to the stability of BTC prices,” Glassnode said.
In contrast to the relative resilience of Bitcoin, altcoins face major challenges. By using Principal Component Analysis (PCA), GlassNode declares that most ERC-20 tokens are closely clustered, indicating a widespread sale across the Altcoin market.
This suggests that very few altcoins avoid volatility and move independently.
“The Altcoin sector took the heaviest relative losses during the recession, and the global Altcoin market capitalization experienced one of the biggest undervaluations on record,” the newsletter read.
The severity of the sale was evident in the global Altcoin market capitalization, which saw a decline of $234 billion over 14 days. However, Glassnode admitted that the decline was not as severe as the previous crash. These included the large-scale migration of miners in May 2021 and the collapse of Luna/UST and 3AC in the second half of 2022.
Is Altcoin season still possible?
Meanwhile, X’s crypto analysts have turned their attention to the trends in the repetitive crypto cycle. Analysts emphasized that Bitcoin’s advantage peaks when it reaches a new history high, but Altcoin’s advantage decreases. This phase often creates a sense of hopelessness among Altcoin investors that feel late in the cycle.
Nevertheless, based on past trends, analysts have revealed that Bitcoin’s advantage usually decreases after a second big price jump to a new record high. This is followed by increased control of Altcoin.
“We still hope that Bitcoin’s advantage will decrease and Altcoin’s dominance will increase,” the post read.
However, analysts have told us that the current cycle is even more intense as few investors hold Bitcoin at more altcoins and higher prices. So the money flow follows first Bitcoin, then the main altcoin, and finally medium and low cap altcoins.
Another analyst also pointed out the key signal for the Altcoin season.
“Some altcoins are being separated from Bitcoin for the first time since 2022. This is the first signal for Bull Run!” he said.
Analysts believe that a significant Altcoin rally is likely before Bitcoin is officially declared its reserve currency. He expects profits from Bitcoin to flow into altcoins, which could cause altcoins season.
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