ALTCOIN BREAKOUT
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CRYPTO FEAR AND GREED INDEX DROPS, DELAYING EXPECTED ALTCOIN BREAKOUT

ByMolly McNearney

The long-awaited altcoin season is still nowhere in sight. One major reason is that the Crypto Fear and Greed Index remains stuck in the fear zone. When investors are scared, they avoid taking risks and usually prefer holding Bitcoin instead of smaller altcoins.

At the same time, Bitcoin dominance is still strong, meaning most of the market’s money is staying in Bitcoin rather than flowing into altcoins. For an altcoin season to begin, investors need to feel more confident and start rotating their profits from Bitcoin into altcoins.

Until market sentiment improves and Bitcoin dominance drops, a strong altcoin rally is likely to remain delayed.

Altcoin Season Remains Elusive as Fear Persists in the Crypto Market

The much-anticipated altcoin season remains out of reach, as the Crypto Fear and Greed Index stays in the fear zone and Bitcoin dominance continues its upward trend.

Summary:

  • The Altcoin Season Index has dropped sharply in recent months.
  • The Fear and Greed Index remains in the fear zone, indicating cautious investor sentiment.
  • The crypto market could see support from upcoming interest rate cuts and the Santa Claus rally.

Altcoin Season Index in the Red

Data from CoinMarketCap shows that the Altcoin Season Index has fallen to 21, down from a high of 55 in July. This decline reflects the fact that most altcoins have underperformed Bitcoin during the ongoing market correction.

The worst-performing altcoins over the past three months include Double Zero, Story, Celestia, Ethena, Pudgy Penguins, Cronos, Aptos, and Arbitrum, all of which have dropped by more than 60% during this period.

As altcoins struggle, Bitcoin dominance has increased significantly, rising from 37% in January to 58% today. Conversely, Ethereum dominance has fallen to 11%, down from a year-to-date high of 20%.

The main reason for the delayed altcoin season is Bitcoin’s correction. After falling from a year-to-date high of $126,200 to the current $89,000, Bitcoin has pulled back sharply. Historically, altcoins tend to perform well when Bitcoin is in a strong upward trend, which has not been the case recently.

Crypto Fear and Greed Index Remains in the Fear Zone

The cryptocurrency market continues to show signs of caution, with the Crypto Fear and Greed Index currently at 21, indicating strong fear among investors. The sentiment remains subdued, especially after the October 10 liquidation event, which wiped out over $20 billion from the market.

Since then, many investors have shifted to deleveraging, with futures open interest dropping from $225 billion in October to $122 billion today. Funding rates across tokens have also flattened, reflecting reduced speculative activity.

Investor caution has been particularly noticeable in altcoins. Businessman Kevin O’Leary recently warned that most altcoins are unlikely to survive long-term, and only Bitcoin and Ethereum are expected to endure. Data confirms this trend, showing that meme coins such as Shiba Inu and Pepe have experienced sharper declines in recent months.

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Despite this cautious environment, there are some positive signals for the market:

  • Altcoin seasons often emerge when the Altcoin Season Index is deeply in the red.
  • Historically, altcoin rallies coincide with the Fear and Greed Index being in the fear zone.
  • The upcoming Federal Reserve interest rate decision could provide support if rates are cut as widely expected.
  • The potential Santa Claus rally may boost both stocks and cryptocurrencies toward the end of the year.

Overall, while fear dominates short-term sentiment, underlying market conditions suggest that a rebound or altcoin rally could still be possible in the near future.

Conclusion

The crypto market is currently dominated by fear, with the Crypto Fear and Greed Index stuck at low levels and Bitcoin dominance continuing to rise. This cautious sentiment has kept the much-anticipated altcoin season on hold, as investors remain hesitant to move capital from Bitcoin into smaller altcoins.

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Despite recent declines in altcoins and widespread market caution, there are positive signals on the horizon. Historically, altcoin rallies often occur when the Altcoin Season Index is low and the Fear and Greed Index is in the fear zone. Upcoming Federal Reserve interest rate cuts and the potential Santa Claus rally could further boost

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