Bitcoin [BTC] risk-on sentiment boosts the altcoin market

The risk-on sentiment in May has significantly boosted the altcoin market, especially after Bitcoin [BTC] surged above $100K last week.

The cryptocurrency market has seen a shift in favor of altcoins, which may be setting the stage for an "initial phase" of altcoin season, according to an analyst.

Bitcoin price may be key to determining crypto market trends

The risk-on sentiment in May has significantly boosted the altcoin market, especially after Bitcoin surged above $100K last week.

Looking ahead, the building momentum may be a signal of an incoming first phase of the altcoin season, noted analytics firm Swissblock.

"First leg of Altseason incoming. Last time we got this confirmation was February and November of 2024," the firm said.

The attached chart shows an uptick in positive altcoin impulse (blue), a trend flashed in both February and November 2024 altcoin run-ups.

The post Bitcoin surges, setting stage for Phase 1 of altcoin season- Swissblock appeared first on AMBCrypto.

Crypto analyst Benjamin Cowen also shared his perspective on the potential for altcoin season.

Cowen noted that, from a price chart perspective, there was an increasing number of altcoins above the 100-day Simple Moving Average (SMA).

"From a chart perspective, it’s pretty clear that we’re seeing more and more altcoins stay above the 100-day SMA. If we get to a point where the majority of the large-cap altcoins are above the 100-day SMA, and they’re able to sustain it for a period of time, then I think we can say that we’re in altcoin season."

As of the last Friday of May, about half of the top 20 cryptocurrencies, excluding Bitcoin and Ethereum, were trading above the 100-day SMA.

Meanwhile, the shift in favor of altcoins was evident in May as Bitcoin dominance hit a cycle high of 65.3 percent, slowing the broader altcoin sector’s April recovery.

However, last week’s BTC jump above $100K was also marked by a sharp 4 percent drop in BTC dominance to 62 percent.

This coincided with a decline in Tether’s USDT dominance from 6 percent to 4.5 percent over the past three weeks, indicating some capital rotation from BTC to the altcoin sector.

This was confirmed by a rebound in altcoin market cap, excluding BTC and ETH, from over $600 billion to over $900 billion.

For context, last November’s altcoin pump was marked by similar signals – a sharp drop in BTC and USDT dominance. This validates the Swissblock outlook if the trend repeats.

That said, it was still a firm BTC season, according to the Altcoin Season Index (ASI) reading of 27.

Notably, the ASI is a lagging indicator, tracking BTC’s performance against altcoins over the past 90 days.

Despite this, Monero, Sui, Bittensor, and Tron outperformed BTC in the same period.

Since April, altcoin season momentum has increased. However, not all altcoins will perform equally. Focusing on sub-sector leaders with strong fundamentals could improve positioning.

The post Bitcoin surges, setting stage for Phase 1 of altcoin season- Swissblock appeared first on AMBCrypto.

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