The much-anticipated altcoin season remains elusive as the Crypto Fear and Greed Index stays in the fear zone and Bitcoin dominance continues to climb.
Summary
– The Altcoin Season Index has slumped in recent months.
– The Fear and Greed Index is in the fear zone.
– The market could benefit from expected rate cuts and a potential Santa Claus rally.
CMC data shows the Altcoin Season Index has fallen to 21, down from a high of 55 in July. This drop reflects altcoins underperforming Bitcoin during the ongoing market downturn.
Top laggards over the past three months include Double Zero, Story, Celestia, Ethena, Pudgy Penguins, Cronos, Aptos, and Arbitrum—each down more than 60% in that period.
As altcoins tumble, the Bitcoin Dominance Index has risen from a January low of 37% to about 58% today. Ethereum dominance has fallen to roughly 11% from a year-to-date high near 20%. A key reason altcoin season has not arrived is Bitcoin’s correction, sliding from a YTD high of $126,200 to around $89,000; historically, altcoins tend to outperform when Bitcoin is in a strong uptrend.
Crypto Fear and Greed Index is in the fear zone
Market sentiment turned sharply negative after the October 10 liquidation event that wiped out over $20 billion. Since then, investors have largely deleveraged: futures open interest fell from $225 billion in October to about $122 billion, and funding rates have flattened. The Crypto Fear and Greed Index currently sits at 21.
Caution toward altcoins has been reinforced by voices like Kevin O’Leary, who warned most altcoins may be worthless and suggested only Bitcoin and Ethereum might endure long term. Data shows many meme coins, including Shiba Inu and Pepe, have fallen particularly hard recently.
Still, there are potential catalysts for a turnaround. Historically, some altcoin seasons have started when the Altcoin Season Index and the Fear and Greed Index are deeply depressed. The market may also get a lift from an anticipated Federal Reserve rate cut and a possible Santa Claus rally, which could buoy both stocks and cryptocurrencies.
