Despite Bitcoin (BTC)'s 10% decline in October, Capriole Investments' altcoin speculation index has remained unchanged at around 25%, suggesting that speculative activity within the altcoin market stays stable and is just not collapsing together with BTC. This relative stability could indicate an early phase of re-entry by market participants as investors selectively move into riskier crypto assets despite macroeconomic caution.
Key Takeaways:
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Altcoin speculation stays stable despite Bitcoin's plunge to $100,000 in October.
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Breadth indicators show limited participation but recovery potential in select altcoins.
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The broader altcoin market cap is just 17% below all-time highs, indicating higher stability than expected.
The altcoin speculation indicator signals an early entry with high risk and high reward
The Altcoin Speculation Index tracks the portion of the crypto market's total capitalization that consists of speculative altcoins, i.e. those without established on-chain or utility metrics.
Historically, lower values coincided with market lows as speculation declined and value-based accumulation began. At 25.4%, the index stays well below euphoric levels (typically above 60%), suggesting there remains to be room for risk appetite to expand before conditions overheat.
Bitcoin price, altcoin speculation index and CryptoBreadth metrics evaluation. Source: Capriole
Meanwhile, Capriole Investments' CryptoBreadth50 and CryptoBreadth200 are at 11.2% and 6.3%, respectively, showing that only a small portion of major cryptocurrencies are currently trending above the important thing 50-day and 200-day moving averages. Such low participation often reflects ongoing risk aversion, but can even precede a broader rally if BTC begins to tug the market higher.
Additionally, the TOTAL3 market cap (total market cap excluding Bitcoin and Ether) is just 17% below its all-time high, underscoring the relative resilience of the broader altcoin complex.
Although overall speculation stays subdued and weak in breadth, the mix of stable sentiment and robust altcoin performance could suggest that smart money is quietly positioning itself for the subsequent phase of expansion.
“Mature” token dynamics point to a brand new kind of altcoin cycle
Bitcoin's recent decline in dominance, down greater than 7% to 57.8% over the past six months, has reignited discussions about whether an altcoin season may very well be on the horizon.
Crypto analyst Matthew Hyland said the continuing downward trend in Bitcoin market share reflects weakening momentum, calling recent rallies a “dead step in a downtrend.”
Hyland suggested that Bitcoin price volatility may very well be “manipulation” by traditional financial institutions’ positioning for the subsequent big phase.
Nevertheless, broader indicators resembling the Altcoin Season Index remain subdued at 41/100 and are still in “Bitcoin season” territory. However, the analyst believes that the subsequent altcoin cycle may not reflect the speculative frenzy of 2017 or 2021.
However, in response to Finality Capital's Kamal Mokeddem, the shortage of a full-scale altcoin rally is just not an indication of decline, but of maturity. Mokeddem argued that altcoins are evolving “from speculative chips to fundamental business primitives,” driving Web3 adoption across the industry.
This article doesn’t contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their very own research when making their decision.
