- The Altcoin Season Index at 22 confirms the market is in Bitcoin Season, with altcoins broadly underperforming BTC.
- Equity market declines, a strong Yen, and weak U.S. data are dragging both traditional and digital assets down.
- Few altcoins like UNI, AAVE, RLB, and HNT showed resilience, while most others erased prior gains or hit new lows.
TheAltcoin Season Index on CoinMarketCap shows that the market is still struggling, giving it a score of 22 at 00:41 UTC on June 2. This data indicates that Bitcoin Season is in full swing since altcoins are not outperforming Bitcoin as a whole.
For an Altcoin Season to be declared, at least 75 out of the top 100 cryptocurrencies—excluding stablecoins and wrapped tokens—must outperform Bitcoin over the last 90 days. However, the current reading implies that fewer than 25% have done so. The market keeps getting weaker, mirroring losses in risk stocks and a decrease in investor confidence. Both Bitcoin and Ethereum dropped in value which furthered the bearish trend established in both traditional and digital markets.
Broader Market Pressures Drag Crypto Down
Equity markets started the week with a sharp downturn following the U.S. Labor Day holiday. This early selloff spilled into crypto, pushing major tokens into deeper losses. Over the past week, the price of Bitcoin (BTC) decreased by 5.11%, while Ethereum (ETH) dropped nearly 6%. Even with increased market swings, the daily liquidations only went as high as $100 million, remaining under $200 million.
Funding rates on BTC returned to positive territory, indicating minor recovery hopes. In contrast, ETH funding rates fell, highlighting mixed investor sentiment between the two largest cryptocurrencies.
Also, the selloff took place as equities started to decline after their rebound in August. The change occurred once the USD-JPY carry trade reversed and the Japanese Yen strengthened, thanks to market beliefs that the Bank of Japan could raise interest rates next month. The changes in the macroeconomic landscape increased the risks for assets such as crypto. The tech sector also faced a heavy setback as Nvidia lost $279 billion in market value, triggered by weak U.S. manufacturing data and reduced enthusiasm around AI-related stocks.
Altcoins Remain Weak Against Bitcoin
Altcoins struggled to keep pace with Bitcoin, as reflected in the flat movement of the TOTAL3/BTC chart. The pair managed only a modest 0.5% weekly gain. Among the few outperformers were DeFi tokens like Uniswap (UNI) and Aave (AAVE). Rollbit (RLB), focused on gambling protocols, and Helium (HNT), a decentralized physical infrastructure network, also saw relative strength.
However, many other altcoins saw deeper declines. Cosmos (ATOM) dropped below its 2022 lows, showing signs of deep capitulation. Others—including Algorand (ALGO), Conflux (CFX), MultiversX (EGLD), and Polkadot (DOT)—have now erased gains from their October 2023 rallies.
Bitcoin Season Confirmed by Index Reading
The Altcoin Season Index reading of 22 confirms that altcoins have broadly underperformed. When fewer than 25% outperform Bitcoin, the market is in the Bitcoin Season. While a higher index score would signal stronger altcoin performance, current figures indicate investor preference remains skewed toward Bitcoin. Despite expectations for a rate cut in September, the market shows little appetite for higher-risk assets, keeping altcoins suppressed relative to BTC.
