Altcoin Season Remains Elusive as Crypto Fear and Greed Index Persists in Fear Zone
The highly anticipated altcoin season has yet to materialize, with the Crypto Fear and Greed Index remaining in the fear zone and Bitcoin Dominance continuing to rise. This trend has left many investors cautious, with some experts warning that most altcoins are worthless and only Bitcoin and Ethereum will survive in the long term.
The Altcoin Season Index, which tracks the performance of alternative cryptocurrencies, has slumped in recent months. According to data from CMC, the index has dropped to 21, down from a high of 55 in July this year. This decline is largely attributed to the underperformance of altcoins compared to Bitcoin during the ongoing crypto market downturn.
Altcoin Season Index | Source: CMC
Top Altcoin Laggards and Bitcoin Dominance
The top laggards in the altcoin market over the past three months include tokens like Double Zero, Story, Celestia, Ethena, Pudgy Penguins, Cronos, Aptos, and Arbitrum, all of which have slumped by over 60%. In contrast, the Bitcoin Dominance Index has continued to rise, moving from a low of 37% in January to 58% today. Ethereum’s dominance, on the other hand, has dropped to 11% from its year-to-date high of 20%.
The main reason for the elusive altcoin season is Bitcoin’s correction after falling by double digits from its year-to-date high of $126,200 to the current $89,000. Historically, altcoins tend to perform well when Bitcoin is in a strong uptrend.
Crypto Fear and Greed Index Indicates Fear in the Market
The Crypto Fear and Greed Index has moved into the fear zone, indicating a sense of caution among investors. This shift follows the large liquidation event on October 10, which saw over $20 billion wiped out from the market. Since then, investors have been deleveraging, with futures open interest plunging from $225 billion in October to the current $122 billion. The funding rate of all tokens has also flattened.
Crypto Fear and Greed Index | Source: CMC
Despite the current fear in the market, there are positive signs that could boost the crypto market. Altcoin seasons often emerge when the Altcoin Season Index is deeply in the red, and the Crypto Fear and Greed Index is in the fear zone. Additionally, the upcoming Federal Reserve interest rate decision, which is expected to result in a rate cut, and the potential Santa Claus rally could provide a much-needed boost to the crypto market.
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