Altcoin Season Expected to Start in September, Says Coinbase Institutional
Coinbase Institutional's monthly outlook suggests an impending altcoin season, forecasting a market shift from bitcoin to alternative cryptocurrencies starting in September.
- Altcoin season is characterized by significant gains in cryptocurrencies other than bitcoin, often led by Ethereum, Solana, and other large-cap tokens.
- The report identifies three drivers for this shift: declining bitcoin market dominance, improving liquidity, and increased investor interest in higher-beta assets.
- Bitcoin's dominance has decreased after peaking earlier this year, prompting capital to flow into large-cap altcoins and subsequently mid- and small-cap tokens.
- Liquidity conditions are improving with tighter bid-ask spreads and deeper order books, facilitating trades in altcoins.
- Investor sentiment is shifting as macro conditions stabilize, leading to greater willingness to invest in riskier crypto assets.
- While the report doesn't specify which tokens will lead, historical patterns indicate that blue-chip altcoins typically outperform before smaller-cap assets.
- Bitcoin is up 27.2% year-to-date, lagging behind some major altcoins like ETH (+37.9%) and XRP (+49%), while others such as SOL (+1.67%) and DOGE (-27.5%) have underperformed.
- The overall market may favor a broader rotation into altcoins in the coming months.