Altcoin season chatter has risen to a 3-month high across social media, but one chart is flashing a clear warning that the rotation may not be as healthy as the token’s recent rallies indicate.
Santiment data shows signs of an ‘altcoinseason’ and ‘altseason’ rally in early May, while Altcoin Vector says weak leadership of Ethereum (ETH) could undermine the move.
Altcoin social volume reaches its highest level in several months
On-chain analytics platform Santiment recorded “altcoinseason” social volume rising to 544 on May 4, the strongest reading since February 5.
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Mentions of “altseason” on May 5 also reached their highest level since March 18, indicating renewed retail interest. This noise is followed by new price action, with Many altcoins are starting to noticeably Marches that raised hopes in Wider rotation away from Bitcoin (BTC).
Together, the data points suggest that sentiment is rising after a period of muted participation in retail trading.
Why is the ETH/BTC chart flashing a warning?
Despite the optimism, Altcoin Vector pointed to a structural problem in how the rally is developing. The OTHERS/BTC ratio, which tracks the total market cap of altcoins excluding the top 10 coins compared to Bitcoin, has started to recover.
However, the ETH/BTC ratio is still weak. This breaks the standard playing rules for rotation, where Ethereum (ETH) is used. Usually leads Altcoins rise before capital flows down the risk curve into smaller tokens.
“This divergence tells us that altcoins may be at the forefront of a potential rotation, skipping the usual ETH lead phase. A healthy rotation usually starts with ETH,” the post read.
Whether the current altcoin push will turn into sustainable support remains to be seen The rotation stops now Ethereum is regaining relative strength against Bitcoin.
If ETH/BTC remains compressed, Vector’s warning suggests that gains across smaller altcoins could be quickly reversed by any weakness in Bitcoin.
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this post Are cryptocurrencies entering the altcoin season? Social buzz reaches its highest level in 3 months appeared first on BeInCrypto.
