In recent months, the crypto community has been buzzing with speculation about the potential for a new altcoin season. Crypto analyst Astronomer (@astronomer_zero) shared an analysis on X, offering a data-driven perspective that challenges the notion that altcoin seasons might be a thing of the past. As Bitcoin’s dominance (BTC.D) continues to rise and altcoins struggle to keep up, Astronomer’s insights provide a fresh perspective on the evolving dynamics of the crypto market.
Understanding the Current Market Sentiment
According to Astronomer, altcoin holders are navigating a challenging market environment. With altcoins still at relatively low prices and Bitcoin dominance on the rise, the situation is tough for those holding ETH and other altcoins. He notes a growing disbelief among investors regarding the possibility of a decline in Bitcoin dominance and the emergence of another altcoin season. Common narratives suggest that developments like Bitcoin ETFs have fundamentally changed the landscape, fostering skepticism about altcoin growth.
The Argument for an Impending Altcoin Season
Despite prevailing narratives, Astronomer urges caution in accepting these views without scrutiny. He emphasizes that such narratives provide comfort and a rationale to avoid holding altcoins, especially during accumulation phases when Bitcoin charts appear more favorable.
Historical Precedence
Astronomer highlights the historical pattern of altcoin seasons occurring in every four-year cycle. This recurring phenomenon is well-documented in historical charts and the collective memory of seasoned investors. He warns against the “this time is different” mentality, which often puts investors at a disadvantage. History, he reminds us, tends to rhyme or repeat itself.
Bitcoin Dominance Chart Aligns with 4-Year Cycle
The Bitcoin dominance chart follows a 4-year cycle, Astronomer observes. He previously predicted a peak in Bitcoin dominance between months 34 to 38 of the cycle. With the current cycle at month 33, he anticipates a shift in the coming months. Betting against these established cyclical patterns, he argues, is a risky move.
The Grand Crypto Rotation
Astronomer describes the “first Grand Altcoin rotation” as a recurring event, typically occurring in Q4 of year 3 in the cycle. In previous cycles, certain altcoins gain traction early on, driven by specific narratives, while the majority see significant gains later, fueled by liquidity flowing from Bitcoin. He cites the 2018–2022 cycle as a prime example, where altcoins like LINK initially outperformed, only to be surpassed by ETH and others later in the cycle.
Overrated Impact of Bitcoin ETF
Addressing the Bitcoin ETF narrative, Astronomer expresses skepticism about its impact on altcoin seasons. He argues that the influence of ETFs is overrated, with accumulated ETF flows amounting to $40 billion, compared to Bitcoin’s daily centralized exchange volumes of $20 billion. He dismisses the ETF narrative as noise and prefers to focus on substantive factors.
Favorable Monetary Policy Looms
Macroeconomic factors also play a role in Astronomer’s analysis. He points out declining interest rates and increasing money supply in the US and China as positive indicators for altcoins. Historically, such monetary conditions have been conducive to altcoin appreciation. He emphasizes that shifts in monetary policy typically favor altcoin growth.
Bitcoin’s All-Time High Is an Arbitrary Indicator
Finally, Astronomer challenges the notion that Bitcoin reaching an all-time high without a concurrent altcoin season signals a permanent decoupling. He argues that Bitcoin’s ATH is an arbitrary gauge and that time and cyclical patterns hold more significance than price milestones.
At the time of writing, Bitcoin is trading at $61,129.
