Why Altcoin Season Is Delayed, According to CryptoQuant CEO

Bitcoin was fast approaching the $100,000 level last week but stopped short, ultimately still hitting a fresh historic high of $99,645.

Bitcoin price hit a fresh all-time high of $99,645 on Nov. 25, following a rapid ascent from hitting the $80,000 level just two weeks prior. The flagship cryptocurrency’s rally has left market participants speculating about the imminence of an altcoin season.

An altseason usually refers to a crypto market phase where altcoins explode in value to often outshine Bitcoin. But one analyst has argued that a capital altcoin season won’t unfold as expected until there are new capital injections from retail investors.

In a lengthy analysis post on Nov. 27, CryptoQuant founder and CEO Ki Young Ju noted that the nature of capital flowing into Bitcoin has shifted compared to the previous market cycle. The current bull market is primarily dominated by institutional investors and spot Bitcoin exchange-traded funds (ETFs).

“Compared to the last cycle, the nature of capital flowing into $BTC has shifted,” wrote Young Ju.

“The current Bitcoin rally is primarily driven by demand from institutional investors and spot ETFs.”

Unlike crypto exchange users, Young Ju said institutional investors and ETF buyers are not interested in rotating their assets from Bitcoin to altcoins. Furthermore, as they continue operating outside of digital asset exchanges, the rotation of assets becomes less possible.

He also observed that altcoin market capitalization remains well below its current all-time high, indicating reduced fresh liquidity from new exchange users.

“For altcoins to reach a new all-time high market capitalization, they will require a significant influx of fresh capital to crypto exchanges,” wrote the quant analyst.

Altseason will only be for a few coins: CryptoQuant CEO

The CryptoQuant CEO claimed that reigniting Bitcoin retail FOMO could increase exchange activity, potentially laying the foundation for an altcoin season. But Bitcoin’s future growth is anticipated to come from exchange-traded funds, institutions, and also governments rather than retail traders on crypto exchanges.

As such, Young Ju believes altcoins should instead focus on creating their own strategies to attract fresh capital rather than fully depending on BTC’s momentum.

He went on to emphasize that while he is bullish on altcoins, he thinks that only a select few coins will manage to attract fresh capital, adding:

“I’m still bullish on altcoins, but altcoin season will come, but it’ll be for a few. Not every altcoin will hit its previous ATH.”