Altcoin Trading Volume on the Rise
The 90-day moving average of altcoin trading volume on centralized exchanges has seen a steady increase since mid-November, indicating a potential start to an altcoin season, according to CryptoQuant.
Altcoin Volume Ratio Surges
CryptoQuant CEO and founder Ki Young Ju shared data revealing that the trading volume ratio of altcoins compared to Bitcoin (BTC) rose from 1.77 to 2.77 as of Feb. 20. This surge in volume ratio may signal the beginning of an alt season, where altcoin prices rise significantly in comparison to BTC.
Ki highlighted that this shift suggests that stablecoin holders are favoring altcoins, with altcoin trading volume now 2.7 times that of BTC. He emphasized that BTC dominance no longer dictates alt season — trading volume does.
Concentration on Top Altcoins
Despite the increasing altcoin/BTC trading volume ratio, data indicates that centralized exchange trading is primarily focused on the four largest altcoins by market cap: Ethereum (ETH), XRP, BNB, and Solana (SOL).
However, the “aggregated altcoin trading volume for stablecoin pairs” has remained stable, except for a peak of $60.4 billion on Feb. 3.
Selective Altcoin Season
In December, Ki warned of a unique altcoin season during this bull cycle, stating that liquidity would be insufficient to drive the entire sector. As a result, only a select few altcoins are expected to experience significant growth.
He suggested that altcoins looking to rally should either create “paper-wrapped versions” akin to Bitcoin, or establish a decentralized ecosystem using stablecoins or BTC to ensure independent appreciation. A recent Kaiko report highlighted that the top 10 altcoins by market cap account for 64% of all altcoin daily liquidity.
Despite the overall negative year-to-date performance of the crypto market, with 59% of altcoin sectors registering losses above 24.9%, there are still opportunities for growth within the sector.
Conclusion
As the altcoin trading volume continues to rise, there are indications of a potential altcoin season on the horizon. With a focus on select altcoins and strategies for growth, the market is poised for interesting developments in the coming months.
