In the recent rally, Bitcoin rose by nearly 30% and surpassed the $81,000 mark. After that, trading activity began spreading to the altcoin group at a very fast pace.
According to CryptoQuant, at its peak, altcoins accounted for up to 65% of volume on Binance, while Bitcoin accounted for only 21% and Ethereum for 13.6%. This is the highest share of altcoin volume on Binance in the past two years.
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Altcoins account for most trading activity
What does an additional $135 billion increase for altcoins mean?
Has it already become an Altcoin Season?
Altcoins account for most trading activity
Altcoins have accounted for as much as 65% of trading volume on Binance, the highest level in two years, while the altcoin sector’s capitalization has risen by about $135 billion following the Bitcoin rally of nearly 30%.
Source: CryptoQuant
New data from CryptoQuant shows that the crypto market is seeing a notable shift: Bitcoin is the asset that kickstarts the rally, but new altcoins are becoming the place where most trading activity is concentrated. This could be the first sign of a broader capital rotation cycle, but it is not enough to confirm that the altcoin season has begun.
AssetsBinance volume share at the peakNoteworthyAltcoin65%Highest in 2 yearsBitcoin21%Sharp decline in shareEthereum13.6%Still accounts for a significant shareAltcoin + ETH78.6%Most trading activity
It’s the nearly 30% surge in BTC that is the initial catalyst bringing liquidity back to the market. After Bitcoin generates sufficiently large profits, traders start shifting to higher-beta assets, where even a smaller amount of capital can produce much larger price volatility.
CryptoQuant describes this change as a liquidity redistribution process in the market. After a long period of low volume and low volatility, attention is shifting strongly to altcoins.
What does an additional $135 billion increase for altcoins mean?
CryptoQuant says the altcoin sector’s market cap, reflected by Total2, has increased by about $135 billion in the recent recovery. This is large enough to show that capital is no longer focused solely on Bitcoin when the market starts to rise again.
An increase in market cap of $135 billion does not mean that $135 billion in new money is truly flowing into altcoins. Market cap is calculated based on market price and supply, so if the prices of many tokens rise together, the total market cap can expand quickly. Volume measures the total trading value, and it is not the same as net new money flowing into the market.
However, when these two pieces of information appear together, the meaning is still highly significant. If only market cap increases while volume does not improve, we may suspect that the rally comes only from thin liquidity. But here, altcoin volume on Binance rises to the highest level in two years, showing that investor interest is truly expanding.
Has it already become an Altcoin Season?
As of August 26, the Altcoin Season Index is only around 37 points, far below the 75-point threshold needed to confirm an altcoin season. The current BlockchainCenter data has edged up to about 41 points, but the system still assesses that the market has not entered Altcoin Season.
Current/recorded indicatorMeaningAltcoin volume on Binance65%Highest in 2 yearsAltcoin market cap + $135 billionLiquidity/value expandsAltcoin Season Index as of 26/837Not confirmed altseasonAltcoin Season confirmation threshold75%Need 75% of the Top 50 to surpass BTC within 90 days
Volume dominance is an indicator of current trading activity, while the Altcoin Season Index assesses altcoins’ ability to outperform Bitcoin over a longer period. A market can have extremely large altcoin volume for a few days but still not be enough to qualify as an altseason.
In other words, the market is currently showing the first signs of rotation, but it has not proven that this rotation will last for many weeks or months. Traders should not mistake a strong speculative surge for a complete cycle change.
Altcoin Season Index on July 27
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Source: https://emacrypto.com/volume-altcoin-lap-dinh-2-nam-tin-hieu-dau-tien-cua-altcoin-season/