Altcoin season potentially underway but remains limited by market liquidity challenges – CryptoQuant

The 90-day moving mean of altcoin trading measurement connected centralized exchanges has risen since mid-November, perchance signaling the commencement of an altcoin season, according to CryptoQuant.

CryptoQuant CEO and laminitis Ki Young Ju shared data showing the trading measurement ratio of altcoins compared to Bitcoin (BTC) roseate from 1.77 to 2.77 arsenic of Feb. 20.

Ki highlighted that this perchance indicates that “alt play has begun.” Alt play is the play erstwhile the prices of altcoins soar compared to BTC.

He added:

“No nonstop BTC-to-alt rotation, but stablecoin holders are favoring alts. Alt measurement is 2.7x BTC. BTC Dominance nary longer defines alt play — trading measurement does […] BTC isn’t a punctuation currency anymore.”

However, information suggests that centralized speech trading is concentrated connected the 4 largest altcoins by marketplace cap: Ethereum (ETH), XRP, BNB, and Solana (SOL).

Despite the rising altcoin/BTC trading measurement ratio, the “aggregated altcoin trading measurement for stablecoin pairs” remains steady, but for a $60.4 cardinal highest connected Feb. 3.

Selective altcoin season

In December, Ki warned his followers that this bull cycle’s alt-coin play would beryllium “weird and challenging” due to the fact that determination is insufficient liquidity to propel the full sector. As a result, lone a fewer altcoins volition soar. He added that the altcoins that are acceptable to rally to caller section highs should travel 1 of 2 paths.

The archetypal is creating “paper-wrapped versions” similar Bitcoin. He’s referring to the ecosystem built astir BTC done accepted concern vehicles, specified arsenic exchange-traded funds (ETFs), Strategy’s BTC acquisitions, and funds investing successful BTC.

The 2nd way is to physique a existent decentralized ecosystem utilizing stablecoins oregon BTC to guarantee that altcoins admit independently. Notably, a caller Kaiko report highlighted that the apical 10 altcoins by marketplace headdress relationship for 64% of each altcoin regular liquidity contempt this worth astir doubling from September to Feb. 11.

Based connected CryptoSlate data, lone 3 of 22 altcoin sectors registered affirmative year-to-date performances. 

The mean crypto marketplace year-to-date show stands astatine antagonistic 24.9% arsenic of Feb. 21, with 13 altcoin sectors registering losses supra this threshold, equivalent to 59% of the altcoin market.

The station Altcoin play perchance underway but remains constricted by marketplace liquidity challenges – CryptoQuant appeared archetypal connected CryptoSlate.