When will Altcoin Season arrive?

📊 Quick take

Another tease. Bitcoin L1Bitcoin is the first and most famous cryptocurrency introducing a new payment network and a kind of currency. View profile” class=”stubHighlight”>Bitcoin once again struggled against all-time highs, hitting $70,000, then bleeding to a low of $66,000 before finally rebounding.

While new all-time highs remain out of reach for the majority of alts that existed during last cycle’s bull market peak, many tokens, including ETH and SOL, reached new cycle highs today! What is the impact of Bitcoin’s rally to new highs and subsequent pullback on the market as a whole?

🧐 The Alpha

As has been the case, this morning’s strong Bitcoin rally has been parasitic on alts, with the crypto’s total market cap down half a percent from BTC at its local peak.

The decline in relative alt strength has sent ETH/BTC down 3% from its early morning highs, but the ratio continues to demonstrate strength, holding above the downtrend line key which has been in place since September 2022.

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Just as many alts have yet to reach record prices, the overall supply of stablecoins sits nearly 25% below its all-time highs.

Some are optimistic that the supply of stablecoins will increase further as the US Federal Reserve cuts interest rates this year, making the high interest rates on stablecoins that come from the demand for leverage of increasingly attractive, but on-chain returns are already very high, above 5% for the first time. since March 2022.

Yields can certainly rise if demand for leverage continues to grow, but the presence of stretched yields already indicates that the market is highly leveraged in the long term.

Source: DeFiLlama

Funding ratewhich cooled significantly after Monday’s blowout, stretched slightly for majors ETH and BTC to around 50% annualized, but remains within acceptable levels assuming crypto markets can maintain their trend on the rise.

As bulls celebrate new highs for crypto assets, Bitcoin’s rejection of the highs gives a semblance of hope to beleaguered bears that the high might lie…

📈 Chart of the day

Expanded funding rates have enabled experimentation with synthetic dollar stablecoins Ethena StablecoinEthena is building a delta-hedged stablecoin, USDe, and internet bond.View profile” class=”stubHighlight”>Ethena will become the third most profitable crypto project in terms of revenue, behind only Ethereum L1Ethereum is the largest smart contact blockchain platform with an expensive decentralized ecosystem.View profile” class=”stubHighlight”>Ethereum and Tron.

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