In conversation with multiple traders: How far are we from a full alt season?

Author: kkk, Rhythm

On August 12, Ethereum broke through $4,700, reaching a new high in four years. @CryptoHayes, who took profits early last week, also bought back Ethereum on August 9; Bitcoin also reached a new high, and the total market capitalization of cryptocurrencies surged to $4.2 trillion, completely igniting market sentiment.

Traditional markets are also bustling. The S&P 500 and Nasdaq 100 in the US stock market both set new historical records, with global liquidity accelerating towards risk assets; the US Dollar Index (DXY) fell below 98, further opening the floodgates for capital to flow into the stock and crypto markets. This macro environment not only solidifies the upward trend but also boosts investor confidence in high-risk assets.

At the same time, the market is almost certain that the Federal Reserve will cut interest rates at the meeting on September 17, with a probability close to 100%, lowering the benchmark rate to a range of 4.00%-4.25%. This expectation provides additional fuel for a market that relies on high liquidity—especially cryptocurrencies. Nowadays, the wealth effect of altcoin season has become a hot topic of discussion in the market, and the key lies in when it will fully kick off.

Next, Rhythm BlockBeats has compiled traders' views on the upcoming market situation to provide some directional references for everyone's trading this week.

@b66ny

BTC.D has recently shown a significant downward trend, having fallen from previous highs to around 57.7%. Combined with the performance of ETH.D, I believe this is a typical signal of capital rotation: market funds are beginning to withdraw from relatively stable assets and are pursuing higher risk and higher potential return targets. Looking back at history, the continuous decline of BTC.D is often one of the necessary conditions for the start of altcoin season.

ETH.D not only represents the strength of Ethereum itself but is often seen as the leader of the entire altcoin market. Currently, ETH.D is showing strong performance, with its dominance rate having risen to 14.0%. Along with the rapid increase in ETH price, ETH/BTC has risen over 4% in 24 hours, indicating a clear trend of funds shifting from Bitcoin to Ethereum.

This trend is a classic script of capital rotation: in the first phase, BTC stagnates or even declines, and funds begin to flow into ETH; the rise of ETH not only boosts market confidence but also creates conditions for more liquidity to be injected into the altcoin market.

What is worth paying attention to next is OTHERS.D (the market capitalization ratio of small and medium-sized altcoins other than major currencies like BTC and ETH). Currently, OTHERS.D is still in a long-term bottom consolidation and has not shown explosive growth similar to ETH.D, which indicates that capital enthusiasm is still concentrated on a few major assets like ETH. Although SOL has also seen a noticeable rise today and the signs of capital rotation are becoming clearer, it has not yet fully spread to the high-risk, small-cap speculative sector.

Looking at the three major indicators, the market is likely in the early stage of rotation.

Occurred: BTC.D is declining, and funds are flowing out.

Happening now: ETH.D is rising, with funds concentrating into ETH.

Not yet occurred: OTHERS.D rises, funds spread to small-cap altcoins.

@im_BrokeDoomer

From the comparison of the market value of altcoins and Bitcoin from 2017 to the present, we are currently at a key support level at the lower edge of the channel. This level has traditionally been a sensitive area for capital entry, often accompanied by a warming market sentiment and accelerated rotation. If this support is confirmed, the altcoin sector is expected to witness a collective explosion, marking the official start of a new round of altcoin season.

The launch process of altcoin season is generally as follows: Bitcoin (BTC) starts the market trend → Ethereum (ETH) follows with an increase → BTC gains momentum again → ETH breaks through its all-time high (ATH) → Large-cap altcoins rise → BTC sets a new high → ETH and large-cap altcoins reach new highs together → Mid-cap altcoins take off → Small-cap altcoins explode comprehensively.

We are currently in the third phase, where ETH and large market cap altcoins are hitting new highs, and we can expect an explosion of other altcoins to follow.

@ZssBecker

During the last bull market in 2020, the narratives of most altcoins did not explode right from the start, but rather fully launched after the price of ETH broke through its historical high and tripled. At that time, funds flooded into new narratives—such as the gaming sector—driving related tokens to surge 10, 20, or even 50 times, with Sandbox even soaring 80 times at one point. Even the most hollow and marginal gaming projects could achieve several times the increase. This phenomenon did not truly occur until the later stages of the bull market, but once it started, it became a concentrated period of wealth effect explosion.

I believe this scene will be repeated in this round of the market. We are currently still in the first phase of the altcoin season—when BTC and ETH dominate. The market funds will only frantically search for the next narrative after ETH breaks above $5000 and mainstream altcoins have completed a 2-3 times increase. The most likely successors will be AI, RWA, and gaming, as these three areas have already been efficiently penetrated and made profitable by the crypto industry in reality, possessing strong narratives and high potential returns.

The launch of the narrative in the previous round of games turned countless people’s capital of several thousand dollars into millions of dollars in assets; this time, the market's capital scale is larger and risk appetite is higher. Once it starts, the driving force of capital will only be more intense. For investors, the key is not to anxiously chase now, but to patiently wait and prepare in advance. When the signal for the narrative switch appears, the climax of the altcoin season will truly arrive.

@lanhubiji

Understanding market structure will make it clear that the altcoin season will definitely come, but the form may be completely different from the past two rounds. In the past, the number of altcoins was limited, and funds were relatively concentrated, leading to a widespread increase in almost all leading sectors; whereas now there are already over a million coins on the market, competition is extremely dispersed, and funds cannot cover all targets.

This means that the current market trend is more likely to see a "local altcoin season"—funds will concentrate on a few sectors or individual tokens that have strong narratives, strong communities, and strong liquidity, resulting in localized euphoria, while most coins will still be overlooked by the market. For investors, opportunities still exist, but the probability of selecting the right targets is much lower than in the past, and there is currently more optimism towards the AI sector.

@joao_wedson

The real altcoin season has not yet begun. The typical flow of smart money is: first from BTC to ETH, then into major cryptocurrencies, and finally spreading to small and mid-cap tokens. The current market has just entered the first half, and the real "altcoin frenzy" is still on the way, possibly continuing all the way to November. In other words, the rise seen now is just the "appetizer," and the real "main course" has yet to be served.