Altcoin Season Next Cycle?
In a market update on June 15, Kevin Capital said the altcoin market is beginning to show signs of basing against Bitcoin after a prolonged downtrend.
The Total Others versus Bitcoin chart is approaching the same major support area that marked the beginning of altcoin recovery in 2019. “I do believe there will be an altcoin season next cycle, unlike the last cycle that we just had,” he said.
The analyst pointed to the end of the Federal Reserve’s quantitative tightening program as a key macro shift. Liquidity conditions are becoming less restrictive, which historically benefits risk assets such as small-cap stocks and crypto.
He also noted that the Russell 2000 has started outperforming larger-cap indices, signaling renewed appetite for risk.
Altcoins Building A Base
Kevin said monthly momentum, money flow and strength indicators are no longer deeply bearish for altcoins versus Bitcoin.
While he does not expect every altcoin to outperform, he believes higher-quality projects could benefit as investors rotate further out on the risk curve in the next cycle.
He also highlighted early examples of relative strength in tokens such as HYPE and Zcash.
Kevin argued that the previous crypto cycle failed to produce a durable altcoin season because global liquidity was being drained from markets. This backdrop made it difficult for altcoins to sustain momentum against BTC.
This time, he says the setup looks different. “Everyone is bearish on the next cycle. I’m not bearish,” he said. “I think it’s going to be bigger than the last cycle.”
Bitcoin Bottom Still Comes First
According to Kevin, Bitcoin still needs to complete its bear market bottom before the next major bull phase begins.
He continues to expect Bitcoin to bottom sometime between July and October based on his broader roadmap.
Once Bitcoin begins a new cycle, he expects it to lead initially before altcoins later form a higher low and begin outperforming more durably.
Image: Shutterstock