"Altseason," a term familiar to many crypto traders, refers to periods when altcoins significantly outperform major cryptocurrencies like Bitcoin and Ethereum.

In the ever-evolving landscape of cryptocurrency, "altseason" represents a pivotal phenomenon where altcoins significantly outperform major cryptocurrencies like Bitcoin and Ethereum. This article delves into the historical patterns of altseason, exploring its implications for investors and the broader market dynamics. By analyzing previous cycles, we uncover the factors that typically trigger these explosive periods of growth, as well as the current market conditions that may signal the next altseason. Understanding these nuances is essential for both seasoned traders and newcomers seeking to navigate the complexities of crypto investing.

Understanding Altseason: What It Is and Why It Matters

"Altseason," a term familiar to many crypto traders, refers to periods when 

 significantly outperform major cryptocurrencies like Bitcoin and Ethereum. Historically, these phases have been characterized by capital rotation from Bitcoin into smaller, riskier projects, often leading to explosive growth in altcoin prices. This phenomenon has been evident in the past three major bull runs, notably in 2017 and 2021, when altcoins surged in value after Bitcoin reached new all-time highs (ATHs).

Bitcoin’s price movements have been cyclical since its inception in 2009. By analyzing historical price data, we can identify distinct periods of boom, bust and recovery. Notably, the two most recent bull runs have witnessed pronounced altseason events, whereby altcoins recorded extraordinary gains, often multiplying their market caps significantly.

For instance, during previous altseasons, the total market capitalization of altcoins surged between 6x and 7x. This explosive growth not only provided immense profit opportunities for traders, but also underscored the 

 inherent in the cryptocurrency space. However, one must also recognize that altseason often precedes the end of a bull run, as profit taking from large-cap tokens leads to a market correction.

Despite the historical significance of altseason, the current cycle appears markedly different. Bitcoin has continued to reach new highs while maintaining a strong market dominance, contrary to the typical pattern in which 

 declines during altseason. This deviation raises critical questions about the nature of the current market, and whether a traditional altseason is imminent.

The Current Landscape: Indicators and Influences

Several factors contribute to the unique dynamics of the current crypto market. First, it’s informative to underscore the importance of Bitcoin’s halving events, which historically precede significant market capitalization and dominance shifts. In previous cycles, Bitcoin's dominance tended to decline approximately 230 days post-halving, leading to a capital rotation into altcoins. However, the recent halving in April 2024 didn’t trigger the expected decline in Bitcoin dominance, suggesting a potential structural change in market behavior.

Moreover, the performance of Ethereum (ETH) relative to Bitcoin has also shifted. Historically, Ethereum served as a primary beneficiary during altseason, often experiencing substantial gains as traders rotated out of Bitcoin. However, since 2022, Ethereum has underperformed not only Bitcoin but also several competing "Ethereum Killers," such as Solana (SOL) and Sui (SUI. This relative underperformance has raised doubts about Ethereum's capacity to lead the market into a new altseason.

 has further complicated the landscape. While the introduction of these ETFs has driven Bitcoin’s price to new heights, it’s also resulted in a capital flow that remains largely focused on Bitcoin and Ethereum. Many institutional investors appear hesitant to rotate their capital into smaller, more speculative altcoins, opting instead to remain in regulated ETF products.

Last but not least, there’s been a significant increase in 

 supply, which has risen by 66% since the start of 2024. This indicates that while institutional activity may explain some market movements, retail engagement remains robust. 

 (CEXs) recorded their largest trade volumes in Q4 2024, suggesting that retail traders are actively participating in the market, potentially looking for altcoin opportunities as liquidity increases.

What Lies Ahead: Potential Scenarios for Altseason

Given the current market dynamics, traders are left to ponder whether an altseason is on the horizon and what form it might take. The accompanying report presents several scenarios that could influence the emergence and nature of the next altseason:

Advanced

FEB25_R5_ BS banner.png

Bybit x Block Scholes Institution Report: Altcoin Rotation — Why Altseason Hasn’t Come This Time?

Feb 10, 2025: Our weekly Institutional Insights explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

 explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

Weekly Highlight — Mixed Job Reports Rattle Market

The recent Bureau of Labor Statistics report indicates that U.S. job growth is slowing, yet remains healthy. Nonfarm payrolls grew by 143,000 last month, with upward revisions for November and December 2024, as they added 100,000 jobs. The unemployment rate has dipped to 4.0%, demonstrating a robust labor market, although the annual revisions suggest job gains were softer than initially reported, averaging 166,000 per month in 2024.

Simultaneously, inflation expectations are rising, driven partly by tariffs proposed by U.S. president Trump. Data from the University of Michigan reveals consumers anticipate price increases, which may complicate the Federal Reserve's decision-making. Fed officials have indicated they aren’t in a rush to lower interest rates further after a series of cuts last year, suggesting they prefer to observe how the economy reacts to potential policy changes.

The job growth in January 2025 was primarily concentrated in health care, retail and government sectors, while mining and manufacturing faced declines. Severe weather conditions contributed to nearly 600,000 people missing work, the highest impact in four years.

Despite these fluctuations, hourly wages increased by 0.5% month-over-month and 4.1% year-over-year, reflecting pressure on wages amid labor market tightness. The participation rate in the labor force stands at 62.6%, with notable contributions from foreign-born workers, highlighting immigration as a critical factor in employment growth.

As the Fed assesses the stability of the labor market, upcoming directives from the Trump administration, including potential immigration restrictions, could impact future job growth and economic conditions. While the landscape shows signs of moderation, it remains resilient, with cautious optimism surrounding economic stability.

Weekly Crypto Highlight — Crypto IPOs Coming

As reported, Gemini, the cryptocurrency firm founded by the Winklevoss twins, is potentially exploring an 

 (IPO) this year. The company is currently discussing the listing with potential advisers, although no final decisions have yet been made.

Bullish Global, a crypto exchange operator whose backers include billionaire Peter Thiel, is considering an IPO as soon as this year.

The interest in going public comes amid a surge of crypto firms accelerating their IPO plans since President Trump's election, as he has shown support for the industry. The Winklevoss twins, known for their legal battles with Facebook's Mark Zuckerberg, previously donated Bitcoin exceeding the campaign contribution limit to Trump, later receiving a refund for the excess.

Gemini employs over 500 people across several global locations, including New York, Seattle and London. Recently, the firm agreed to pay $5 million to settle a Commodity Futures Trading Commission (CFTC) lawsuit alleging it misled regulators while trying to launch the first U.S.-regulated Bitcoin futures contract. Additionally, Gemini has committed to returning at least $1.1 billion to customers affected by the Genesis Global Capital bankruptcy as part of a settlement with New York regulators relating to its Gemini Earn program.

10 Feb 2025 Weekly Newsletter.png

Weekly Institutional Insights: Mixed U.S. Job Reports; Crypto IPOs Coming

VeChain Thor Energy (VTHO) is used for gas to execute transactions on the VeChain network. Learn more about how VeThor works and how to trade VTHO on Bybit now!

VeChain, which began as a supply chain blockchain platform, has grown into a Layer 1 (L1) blockchain with a wide range of applications. It stands apart from most blockchains by employing a dual token model, rather than relying on a single native token. In this article, we look at the VeChain Thor Energy (VTHO) token, mainly used for gas in the VeChain ecosystem.

The VeChain token (VET) is used to transfer value across networks. Meanwhile, VeChain Thor Energy (VTHO) is used for 

 to execute transactions on the network. On other L1 networks like Ethereum or Solana, the native token is used for both gas and transfer of value. However, VeChain decided to split these functionalities into two different tokens. 

VeChain believes this dual-token model allows its network to provide predictable transaction costs over the long term. Because VTHO only works for gas, and not as a value transfer token, its price is less volatile as compared to the VET token. This is crucial for the VeChain network, since it wants to attract large businesses that require stable and predictable operational expenses. Additionally, VTHO is also used to incentivize VET holders, as holding VET generates a steady supply of VTHO rewards over time.

VTHO acts as VeChain’s gas token. In other words, it’s used for the cost of carrying out payment and 

. The token is awarded to those holding VET at a constant rate of 5.10

 per second. For example, if a wallet holds 10,000 VET, it’s likely to generate 4.32 VTHO every 24 hours. 

As a gas token, VTHO doesn’t have a maximum supply. Its generation depends entirely upon the number of VET tokens currently held by other wallets. 

When users want to transact on the VeChainThor network, they need to pay the required gas in VTHO. The cost of a transaction is determined by the amount of gas required for the transaction, multiplied by the gas price in VTHO, which is a constant value equal to 1.10

. For example, if an individual were to carry out a transaction that costs 21,000 in gas, they would need to pay 21,000 × 10

Since the supply of VTHO is unlimited, its tokenomics includes a 

 dynamics in balance. Seventy percent of the VTHO that’s used to pay for gas is destroyed by the network. The remaining 30% is used to reward authority master nodes who execute the transactions. Through this mechanism, VeChain is able to regulate the circulating supply of VTHO and maintain a stable VTHO value for predictable transaction costs.

VeChain can also adjust burn parameters, based on network adoption. The burn rate can be lowered or raised, depending upon the number of transactions taking place on the network. This gives VeChain the ability to stabilize VTHO’s price during either peak or slow demand.

The VTHO token was launched on Jun 30, 2018, along with the VeChain mainnet. VTHO was airdropped to all holders of VET, both on-chain and on 

 (CEXs). Following the launch, the token’s price largely remained stable at between $0.0003 to $0.0006 for over two years. It witnessed a sharp increase during the 2021 bull market, going as high as $0.023, but lost more than 90% of its value in the ensuing bear market.

On Jan 21, 2025, the VTHO token witnessed a sharp increase in price following its listing on the Korean exchange Upbit. Its price surged over 300% and is trading at $0.005 as of Jan 27, 2025. 

VTHO has a total supply of almost 86 billion tokens, and its current market cap hovers around $337 million. The most recent 24-hour trading volume for the token is around $15 million.

Future Developments and New VTHO Tokenomics

 a new tokenomics model that’s aimed at improving VTHO and the VeChain ecosystem. As we discussed above, in the current model VTHO is generated uniformly across wallets holding VET tokens, including exchange wallets. But with the proposed new model, VTHO will no longer be generated at the VET token level. Instead, it will be generated by groups actively supporting the network, such as:

VTHO issuance will also become dynamic, and will be linked with the quantity of VET staked at the given time. These changes are likely to be implemented in Q3 2025, and are part of a larger vision to revamp the entire VeChain network. The exact road map includes two main phases, named Galactica and Hayabusa. 

Galactica is scheduled for Q1–Q2 2025. It will bring a dynamic gas fee model and 

. Hayabusa is scheduled for Q3–Q4 2025, and is set to bring new VTHO tokenomics to the ecosystem. 

VTHO has served its primary purpose of providing a predictable operational cost on the VeChainThor blockchain. With additional features and new tokenomics set to launch in 2025, the VTHO token is set for an eventful year ahead that will change the way the token is generated and distributed. 

Beginner

vethor, vtho.png

VeThor (VTHO): Gas Token for the VeChain Ecosystem

Our weekly crypto derivatives analytics report delves into macro events and the current state of crypto and trading signals from spot trading volume, as well as futures, options and perpetual contracts.

Another week brought another risk-off event in the crypto market, reflecting its correlation with equities. Despite last week's sell-off, BTC outperformed the broader market with a milder decline, evident in its derivatives positioning. Options markets initially priced short-term volatility higher, but the inversion resolved quickly. In contrast, ETH experienced a sharper inversion, with significant spikes in short-term options and realized volatility. A liquidation event led to an estimated $10 billion loss in open interest for perpetual swap contracts, 

. This bearish sentiment was reflected in funding rates, with altcoins showing a more persistent negative trend post-crash as compared to BTC.

Open interest collapsed across major tokens, flipping funding rates negative, except for BTC. ETH's realized volatility surged above 140%, its highest level in over three months, with the implied volatility term structure spiking and remaining inverted days after the crash.

Please check out the report’s highlights.

Open Interest Falls During Painful Liquidation Event

Another Monday sell-off occurred alongside a decline in U.S. equities and other risk-on assets due to fears over Trump tariffs, leading to a drop in perpetual swap positioning. Nearly $3.1 billion in open interest was wiped out from the perpetual swap markets of BTC, ETH, XRP and SOL after a late-Friday high. This decline was likely driven by liquidated leveraged positions, as traders missed margin calls during the rapid drop in spot prices. Bybit CEO Ben Zhou estimated that the true notional value of liquidated positions across markets may have ranged from $8 billion to $10 billion. The sell-off also triggered the largest spike in trading volumes in over a month, with $31 billion in perpetual swap contracts traded on Feb 2, 2025 across the four major tokens’ markets.

Altcoin Funding Rates in Negative; BTC Clings to Neutral Rates

A second consecutive Monday-morning sell-off has kept perpetual swap funding rates low and negative, indicating excess demand for leveraged short exposure. This trend likely stems from the liquidation of long positions, due to the sharp correction in spot prices. Notably, altcoins' funding rates have shown more consistency since February 3, 2024, reflecting their steeper declines as compared to BTC’s.

ETH's spot price experienced a deeper correction than BTC’s during Monday's sell-off, dropping below $2.5K. Surprisingly, options market activity remained steady, likely due to fewer at-risk leveraged long positions to liquidate, thus keeping open interest levels firm. However, the spot move caused realized volatility to spike near 140%, with options markets pricing in a significant term structure inversion that has yet to be resolved. ETH's implied volatility is approximately 15 points higher than BTC's at equivalent tenors, indicating that traders expect continued volatility in ETH's spot price.

block-scholes-x-bybit-report.jpeg

Bybit X Block Scholes Crypto Derivatives Analytics Report (Feb 5, 2025): Record Liquidations Result From Perp; Traders Expect More Volatility in ETH

Bybit Learn

Crypto

Trading

Explainers

The Crypto Fear & Greed Index provides insights into market sentiment. It helps assess traders' emotions on an asset to help you decide on market entries and exits critically. But is it reliable? Read on to find out.

When it comes to investing, emotions often play a significant role, driving market trends and influencing investment decisions. Enter the Crypto Fear and Greed Index, a powerful tool that helps investors navigate the rollercoaster of emotions in the 

 market. By providing real-time insights into 

, this index empowers you to make informed decisions and optimize your investment strategy.

Understanding Market Sentiment: Fear and Greed

Market sentiment is a key factor in determining asset prices and is primarily driven by two emotions: fear and greed. Fear can lead to selling and short-selling, causing prices to decline, while greed fuels asset accumulation and 

 (fear of missing out), driving prices upward. Understanding market sentiment and stock market movements is pivotal for pinpointing investment opportunities and, more importantly, controlling your own emotions during investment.

The Fear and Greed Index, created by CNN Business, is a tool that quantifies stock market fluctuations and evaluates the appropriate pricing of stocks. It utilizes a composite of seven distinct indicators to gauge the level of fear and greed in the market, which can be referred to as the cnn business fear. These indicators include:

By analyzing these indicators, the Fear and Greed Index provides valuable insights into market sentiment.

In a fear-driven market, prices tend to decline as investors dispose of their assets to avoid potential losses. 

, a trading technique wherein traders sell assets they do not possess with the expectation of repurchasing them at a lower price, is typically associated with fear-driven markets. Such market behavior can sometimes lead to bitcoin price manipulation and further contribute to the downward trend.

Fear can have a significant impact on individual investment decision-making, causing reluctance to invest and prompting premature sales of fundamentally sound investments. Comprehending fear-driven market behavior and its possible impacts on investment results is key to steering through the volatile crypto market.

The Role of Greed in Investment Decisions

Greed, on the other hand, is the emotive response that occurs when traders are confident about the market, prompting riskier investments and longer asset retention. FOMO, or the fear of missing out, is a sentiment often present in greed-driven markets, leading investors to:

Greed-driven behavior can manifest in various ways, such as impulsive decision-making, excessive risk-taking, and a focus on short-term gains over long-term investment strategies. Identifying greedy market behavior is key to spotting potential overvaluations and inflated asset prices, which enables better investment decisions.

The Fear and Greed Index was initially launched by CNNMoney in 2012 as a measure of investor sentiment in the stock market. The index evaluates seven distinct indicators to provide a comprehensive view of market sentiment:

The index, with the greed index calculated on a daily, weekly, monthly, and yearly basis, weighs each indicator equally to determine a score between 0 and 100, with 100 representing maximum greediness and 0 signaling maximum fear. By assessing the deviation of each indicator from its average versus the typical divergence, the Fear and Greed Index helps investors understand whether stocks are trading higher than their estimated value due to greed or lower than their estimated value due to fear.

Crypto Fear and Greed Index: A Tailored Approach

While the Fear and Greed Index provides valuable insights into the stock market, it doesn’t specifically focus on the cryptocurrency market. To address this gap, Alternative.me developed the Crypto Fear and Greed Index, a tailored tool designed to gauge emotions affecting the cryptocurrency market. The index employs a scale of 0 to 100, with 0 indicating extreme fear and 100 indicating extreme greed.

The Crypto Fear and Greed Index distinguishes itself from traditional fear and greed indices by focusing on the unique characteristics of the cryptocurrency market, which often consists of retail traders without a professional background in finance. This index, by offering real-time insights into market sentiment, aids investors in making better decisions and refining their investment strategy in the cryptocurrency market.

Theoretically, you can design your own Fear and Greed Index. The prerequisite is that your data is both correct and correctly used. For example, a certain basic knowledge of market events and reactions is necessary in order to realistically assess the effects of certain events. The weighting of individual factors also plays an important role in your analysis.

Different zones on the index chart and slider have different meanings.

This is how the Crypto Fear and Greed Index is measured:

Calculating the Crypto Fear and Greed Index

The Crypto Fear and Greed Index uses a variety of weighted data sources to calculate its score, including:

The primary indicators employed in the calculation are volatility, market momentum/volume, social media, dominance, and trends.

Each indicator receives an equal-weighted percentage in the computation, and the index is calculated on a daily, weekly, monthly, and yearly basis. The Crypto Fear and Greed Index provides investors with a clear understanding of the prevailing market state of fear or greed by assessing these metrics in real-time and comparing them to historical averages.

Interpreting the Crypto Fear and Greed Index

The Crypto Fear and Greed Index is a valuable tool for investors who want to make better decisions by understanding market sentiment and trends. Interpreting the index allows investors to identify market behaviors driven by fear and greed, thus providing useful insights for making better decisions.

The index displays a numeric value along with the accompanying interpretation, ranging from extreme fear to extreme greed. By observing these values and their trends over time, investors can make more informed decisions about when to enter or exit the market, optimizing their investment strategy.

Fear-driven markets can be detected by tracking market sentiment using the Crypto Fear and Greed Index, anticipating downward trends in the market. Volatility, market momentum/volume, and a prevailing sentiment of fear among market participants are all indicative of a fear-driven market in cryptocurrency trading.

When the index displays higher levels of fear, it indicates a bearish sentiment among investors, which may result in a downward trend in prices. Comprehending fear-driven market behavior and its potential impacts on investment outcomes is key for steering through the volatile crypto market and making better decisions.

Greedy stock market behavior can be identified by observing the following:

When the index indicates extreme greed, there are potential risks that could be encountered, such as:

Recognizing greedy market behavior can help investors make more informed decisions and optimize their investment strategy.

Strategies for Managing Emotions in Investing

Controlling emotions in investing involves utilizing tools such as the Crypto Fear and Greed Index and formulating strategies to maintain a balanced approach. By comprehending market sentiment, distinguishing fear-induced and avaricious markets, and executing tactics such as diversification and asset allocation, investors can make more educated and unbiased decisions.

Establishing realistic expectations, diversifying investments, and implementing 

 orders are some strategies that can help investors manage their emotions and make more informed decisions. By understanding and avoiding emotional biases, investors can focus on long-term goals and avoid short-term emotional reactions.

Integrating the Crypto Fear and Greed Index into Your Investment Strategy

Incorporating the Crypto Fear and Greed Index into your investment strategy can help you make better decisions by understanding market sentiment and trends. When the index reveals extreme fear, it could be a buying opportunity as investors may be excessively anxious. Conversely, extreme greed may signify that the market is due for a correction.

Investors can make better decisions and fine-tune their investment strategy by using the Crypto Fear and Greed Index alongside other market indicators. However, it’s vital to always conduct personal research and consider various data sources before making any significant decisions.

Real-World Examples: Crypto Fear and Greed Index in Action

Real-world examples demonstrate the effectiveness of the Crypto Fear and Greed Index in predicting market behavior and guiding investment decisions. For instance, there have been occurrences where the index changed from extreme trepidation to avarice, pointing to a potential upturn in prices. This alteration in sentiment has commonly been followed by a noteworthy rise in the market value of cryptocurrencies.

While the Crypto Fear and Greed Index provides useful insights into investor emotions, it’s important to remember that it doesn’t predict future price movements. The index is beneficial for discerning market sentiment and emotion, yet it should not be entirely depended upon for making investment decisions.

Future improvements to the Crypto Fear and Greed Index could incorporate AI analytics, distinguishing between institutional and retail investors, and monitoring decentralized vs. centralized exchange usage. AI analytics could improve the precision of the Crypto Fear and Greed Index by evaluating market sentiment indicators in real-time, providing a more precise representation of market sentiment.

Tracking decentralized versus centralized exchange usage can provide valuable insights into the sentiment and behavior of cryptocurrency traders, which can in turn enhance the Crypto Fear and Greed Index. As the cryptocurrency market continues to evolve and grow, so too will the tools available to help investors navigate its complexities.

In conclusion, the Crypto Fear and Greed Index is a powerful tool that helps investors navigate the emotional landscape of the cryptocurrency market. By understanding market sentiment, recognizing fear-driven and greedy market behaviors, and employing strategies to manage emotions, investors can make more informed decisions and optimize their investment strategy. As the cryptocurrency market continues to evolve, the Crypto Fear and Greed Index will undoubtedly remain an invaluable resource for investors seeking to understand and capitalize on market trends. #Bybit #CryptoArk

The Fear and Greed Index is a 100-point scale that provides insights into whether fear or greed is dominating the financial markets at a given time. It is calculated by compiling seven different indicators that measure various aspects of stock market behavior. The index value is an equal-weighted average of these indicators.

What is the difference between fear and greed index and the S&P 500?

The Fear and Greed Index is a market sentiment indicator that measures investor emotions by comparing the S&P 500 to its rolling average over the past 125 days. When the index is above this average, it shows investors are getting optimistic (greed) while when it's below, it shows they are becoming anxious (fear).

The Fear and Greed Index is an index of seven different indicators that measure investor sentiment on the stock market. This matrix includes factors such as market momentum, stock price strength, options activity, junk bond demand, volatility and safe haven demand, which are all scored from 0 to 100 and equally weighed to generate the index value. It is seen more as a market-timing tool than an investment research tool.

The Crypto Fear and Greed Index, developed by Alternative.me, measures the sentiment of the cryptocurrency market to offer insight into buying and selling opportunities.

What strategies can be utilized to manage emotions in investing?

Strategies for managing emotions in investing include establishing realistic expectations, diversifying investments, and implementing stop-loss orders to limit losses.

Unveiling the Crypto Fear and Greed Index: A Powerful Tool for Investors

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards