After the recent surge in altcoin prices, talks about the possible start of the altcoin season are gaining significant momentum. Interestingly, recent on-chain data about rising altcoin trading volume has added some weight to the alt season discussions.
Altcoin trading volume rises above annual average
In a recent Quicktake post on the CryptoQuant platform, CryptoOnchain open A decisive change in the altcoin market. Citing the “CEX Trading Volume Ratio: Others vs. Top 5” metric, the market analyst explained that altcoin trading volume has been on an upward trend recently.
The “CEX Trading Volume Ratio: Others vs. Top 5” metric tracks how much trading volume flows into altcoins outside the top 5, compared to the combined volume of the top 5 assets. As such, they play a key role in determining the extent of capital turnover and whether altcoins are starting to gain strength.
Related reading
According to CryptoOnchain, the 30-day moving average of altcoin trading volume has now crossed the 365-day moving average. The analyst explained that this trend shows that the size of this sub-asset class is steadily increasing.
Higher readings in the CEX:Others vs. Top 5 trading volume ratio are signs that traders are leaning towards smaller altcoins rather than the major cryptocurrencies (Bitcoin, Ethereum, Solana, XRP, BNB). This, in turn, is interpreted as increased risk appetite, which may positively impact the rise of altcoins.
The market analyst cited historical data, noting that instances where signals flash mostly reflect short-term volume growth compared to the long-term baseline. These cases also indicated “a clear transfer of capital from major currencies to mid- and low-value altcoins.”
For example, during the 2021 Taurus cycle, combinations of these recurred The signals coincided with explosive marches Across the altcoin sector, in addition to the significant rise in Ethereum prices.
Notably, the chart shared by CryptoOnchain shows the purple “Volume Ratio” line gradually strengthening again after a period of weakness. The analyst noted that a breakout in the ratio could precede periods of high volatility, which could increase the potential for an altcoin market rally.
Ethereum’s stability may confirm the imminent altcoin rally
CryptoOnchain further explained that the reactivation of altcoin trading volume could be a sign that “interest from individuals and institutions is expanding beyond the top five assets.” However, this does not necessarily translate into bullish news for the altcoin market.
According to a cryptocurrency analyst, it has been confirmed by Ethereum price movement It may be necessary to determine internal market dynamics.
CryptoOnchain explained:
If this momentum continues and is accompanied by a stable or rising ETH price, it could be a strong confirmation of a broader altcoin rally.
As of press time, Ethereum’s price is $2,329, up 1% in the past 24 hours, according to CoinGecko data.
Related reading
Featured image from Shutterstock, chart from TradingView
