The much-anticipated altcoin season has remained in the sidelines this month as most tokens struggle and the Crypto Fear and Greed Index pulled back to the fear zone. This article explores whether the altcoin season will charge ahead in September.
Why the altcoin season has stalled
The Altcoin Season Index has been under pressure in the past few weeks. Its 30-day one has plunged to 46, down from over 50 last month.
Similarly, the 90-day figure has dropped to 48, down from the year-to-date high of over 55. Its retreat has coincided with the ongoing Bitcoin dominance.
There are a few reasons why the altcoin season is not happening this year. First, Bitcoin Dominance has continued rising this year, and currently stands at 57%. While Ethereum’s dominance has jumped of late, it has not been enough to offset the performance of other tokens.
Second, many altcoins have remained under pressure this year, dragging the index. Some of the laggards over the last 90 days included tokens such as Pi Network, Virtual Protocol, Pump, Celestia, Fartcoin, and Worldcoin.
Third, a key theme this cycle has been that any attempts for the crypto market to recover was met with huge selling pressure. For example, Solana recently rebounded to $217 only for it to pull back.
Most importantly, there are signs that investors are focusing on Bitcoin, Ethereum, and a handful of big cryptocurrencies.
At the same time, macro factors have also contributed to the delayed altcoin season. Interest rates and the ongoing quantitative tightening have continued to put pressure on the market.
Crypto Fear and Greed Index has slipped
The altcoin season has remained under pressure as the Crypto Fear and Greed Index has moved to the fear zone. It dropped to a low of 39 on Tuesday, meaning that investors are fearful about the market.
The Crypto Fear and Greed Index is a gauge that examines four key elements, including price momentum, volatility, activity in the derivatives market, market composition, and other proprietary data.
Cryptocurrency prices often do well when there is a sense of greed in the market. They then underperform the market when there is no greed.
Why the altcoin season may happen soon
Still, there are a few reasons why the altcoin season may start soon. First, the Securities and Exchange Commission (SEC) has put the deadline for most ETF approvals at October this year. With just a month to go, it is likely that many altcoins will soar in anticipation.
Second, the Federal Reserve is likely to start cutting interest rates this month. In this, it will likely move them from between 4.25% and 4.50% to between 4.0% and 4.25%. The crypto market often thrives when the Fed is cutting interest rates.
Third, most altcoins have strong technicals, with many of them having formed a double-bottom pattern. In this case, these patterns often lead to more upside over time.
Finally, the ongoing trend of treasury accumulation will likely lead to more gain in the crypto industry.
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