Altcoin Season Is Here – But Not As Expected

The long-awaited altcoin season (alt season) has arrived, according to CryptoQuant CEO Ki Young Ju.

However, the analyst says this one plays by different rules, unlike previous cycles driven by a clear Bitcoin-to-altcoin capital rotation.

Analyst Calls Altcoin Season—But Not as Expected

Ju’s latest observations suggest that stablecoin holders, not Bitcoin traders, fuel selective altcoin gains while market liquidity remains constrained.

In a recent post on X (formerly Twitter), Ju declared that alt season has begun, citing a sharp increase in altcoin trading volumes. According to the analyst, the altcoin trading volume is now 2.7 times that of Bitcoin. However, Ju also noted that this is not a broad-based rally.

“It’s a very selective alt season…Only a few coins are pumping. With no fresh liquidity, it feels like a PvP fight over a fixed pie,” he wrote.

This assertion aligns with his earlier warnings. In January, Ki cautioned that the altcoin market remains a zero-sum game, with capital circulating among assets rather than seeing new inflows. In December, he also predicted that this alt season would be “weird and challenging,” favoring only select assets.

“Altcoins used to move together based on their correlation with BTC, but that pattern has now broken. Only a few are starting to show independent trends as they attract new liquidity,” Ki had written.

While some traders are excited, others remain unconvinced. RobW, a user on X, questioned Ju’s definition of alt season.

“A few tokens are pumping, so it must be alt season? None of the usual metrics apply, but it’s alt season if you pick really carefully, doesn’t sound like an alt season,” RobW challenged.

Similarly, DeimosWeb3 suggested that while some altcoins are performing well, the market has not yet entered a full-fledged alt season.

China’s Fiscal Moves and Crypto Markets

A parallel discussion in the crypto community involves China’s recent fiscal maneuvers. Some speculate that China’s economic policies could inject liquidity into global markets, benefiting crypto.

However, analysts urge caution, pointing out that China has not injected new capital but recalculated its M1 money supply to include demand deposits and prepaid funds.

“They didn’t inject new capital. They “recalculated” it to include other deposits and funds. There is no fresh print,” a user on X articulated.

Local media confirms this, indicating that the People’s Bank of China, the country’s central bank, will include these elements starting in 2025.

Crypto and DeFi researcher NFT Bear highlighted that this change led to a dramatic 67.59% increase in reported M1 supply. However, he emphasized that it does not equate to fresh liquidity hitting financial markets.

Historical comparisons to the US’s 2020 money-printing frenzy have also surfaced. The US quickly increased its M1 money supply back then, fueling a 16x surge in altcoin market capitalization.

While China’s current actions differ, some traders speculate that even a fraction of new liquidity flowing into crypto could trigger another bull run.

“Whether or not this translates into another explosive crypto rally remains to be seen. But one thing’s for sure: when a major world economy infuses liquidity—no matter how it’s measured—financial markets tend to take notice, and crypto is often at the center of that conversation,” NFT Bear indicated.  

Despite the uncertainty, some altcoins have outperformed. Projects like Sei (SEI), Sui (SUI), Zksync (ZK), and Story (IP) have attracted attention, possibly signaling emerging narratives in the space.

Whether these gains are sustainable or merely temporary surges in a fragmented market remains to be seen. Nevertheless, analysts agree that the traditional altcoin season metrics no longer apply.

The crypto market is changing, with Bitcoin acting as a paper-based asset through ETFs (exchange-traded funds) and institutional funds. Instead of a broad BTC-to-alt capital rotation, altcoins appear to be carving out independent narratives and utility to attract capital.