A widely watched indicator has changed to “altcoin season,” for the opposite reason the label suggests. Glassnode’s Altcoin Cycle signal, which reads above 50 when altcoins, or alts, outperform bitcoin, has risen to 86. Altcoins are not recovering. Bitcoin is simply falling faster than them.
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The signal tracks relative performance, so alts may lead by going up or down less. This is the second case. After almost two years of declines, alternatives ran out of sellers and stabilized, while bitcoin fell sharply, falling back towards $63,600, according to data from CoinDesk. Bitcoin, as Glassnode says, “is still doing most of the work.”
In a true altcoin season, capital rotates into smaller tokens as they rise. This is the hollow version, where the reading becomes bullish for alternatives because bitcoin is selling off, which is bearish for the market as a whole. Relative strength is not a rally.
Until alts start rising on their own instead of holding while bitcoin falls, the signal says more about bitcoin’s weakness than the demand for anything else.
