Glassnode reports shift from Bitcoin to altcoin season amid broader rally

Altcoin season is officially on the scoreboard, at least by one widely-watched measure. Glassnode’s Altcoin Cycle Signal climbed to 86 on June 22, comfortably clearing the 50-point threshold that marks the boundary between Bitcoin dominance and altcoin outperformance.

The catch: a meaningful chunk of that signal was powered by Bitcoin falling roughly 18% in the month leading up to the reading, not by altcoins suddenly becoming irresistible.

What the signal actually says

Glassnode’s Altcoin Cycle Signal measures how altcoins are performing relative to Bitcoin. When the number sits above 50, altcoins are winning the relative performance race. When it’s below, Bitcoin is the one taking home the trophy.

Glassnode flagged that the move was driven significantly by Bitcoin’s pullback rather than by explosive, independent demand for altcoins. The firm also noted that altcoins had essentially “run out of sellers” after nearly two years of sustained downward pressure.

By July 4, Glassnode issued an updated read confirming the signal remained firmly in altcoin season territory, this time with what the firm characterized as genuine strength on both a relative and absolute basis.

The September update complicated things

Fast-forward to mid-September, and the picture got more nuanced. The total altcoin market cap had risen approximately 21% month-over-month.

But Glassnode pointed to a conspicuous absence of leverage. Open interest in altcoins remained substantially below Bitcoin’s levels, meaning traders were not borrowing aggressively to amplify their altcoin positions.

CoinMarketCap’s Altcoin Season Index complicated the picture further. That index sat at around 45 in September, technically still in Bitcoin-dominance territory. Two reputable analytics providers were looking at the same market and arriving at different conclusions. The two metrics are constructed differently, track different baskets of assets, and weight performance over different time windows.

What this means for the market

A confirmed altcoin season reading at 86 tells you that the relative trade has shifted. Holding a diversified basket of altcoins has been beating holding Bitcoin over the relevant measurement window.

The subdued leverage picture is where the caution lives. Low open interest means the current rally has not yet attracted the crowd of momentum traders who typically pile in mid-cycle.

Bitcoin’s own trajectory adds another variable. The initial altcoin signal in June was partly a function of BTC’s 18% drawdown. If Bitcoin resumes an upward trend, BTC dominance could reassert itself and pull the Glassnode signal back below 50 without altcoins necessarily losing ground in absolute dollar terms.

Glassnode’s July update, which pointed to strength on an absolute basis, suggested a capital-expansion dynamic was beginning to take hold. Whether it persisted through Q3 and beyond is what the September leverage data was quietly questioning.

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