Key Points
- Altcoin season has arrived with many tokens outperforming Bitcoin (BTC) in the past 90 days.
- Despite potential for further growth, analysts warn of possible risks and urge caution.
The highly anticipated altcoin season has finally arrived, showing significant strength as we move into December.
Data from Blockchain Center indicates that the altcoin season index reading has reached a 12-month high of 82, confirming that it’s indeed an ‘alt season’ rather than a Bitcoin season.
Top Performers
The surge in altcoins was led by top performers such as Ripple [XRP], Hedera [HBAR], Stellar [XLM], and Dogecoin [DOGE], all of which outperformed Bitcoin.
Over the last 90 days, HBAR saw an increase of over 600%, while XLM and XRP followed closely with gains of 515% and 402% respectively. However, Ethereum [ETH] and Binance [BNB] didn’t fare as well, lagging behind Bitcoin.
The Altcoin Surge
The impressive altcoin surge was facilitated by a decline in Bitcoin dominance (BTC.D), which accelerated in November.
On November 21st, BTC.D peaked at 60% but has since fallen to 54%, allowing the altcoin sector to expand as capital shifts from Bitcoin to other sectors.
Historical trends suggest that the altcoin surge could continue. At present, OTHERS, which represents the altcoin sector excluding the top 10 tokens, has gained ground against Bitcoin in the past month.
Despite this, CryptoQuant founder, Ki Young Ju, warned that the anticipated capital rotation to altcoins might not occur due to the increasing presence of ETF players and institutions in Bitcoin.
Analysts have also cautioned about a potential sell-the-news event during Trump’s inauguration in January 2025, highlighting the importance of risk management to preserve capital.