Wintermute Explains Delay in Altcoin Season

A full-fledged altcoin season will commence only when the leading cryptocurrency approaches its ATH. This conclusion was reached by analysts at market makerWintermute.

They noted that the market has recovered from the October downturn, and investor sentiment has improved. Traders have begun to take selective risks. 
However, the inflow of capital into digital currencies has not yet resumed, causing the sector to lag behind other asset classes.
The growth leaders for the week were segments:

• DePIN: +22%;
• L2 solutions: +13%;
• projects with “medium” capitalization: +15%;
• AI tokens: +9.6%;
• DeFi: +8.8%.

Meanwhile, the L1 blockchain sector showed a decline of 1%. This disparity indicates that investors are adding risky assets to their portfolios, but are doing so very cautiously, Wintermute explained. 
Historically, altcoins perform well when the price of Bitcoin is near its peak values. This creates a “capital spillover” effect into riskier coins.
At the time of writing, the leading cryptocurrency is trading about 16% below its ATH, according to CoinGecko. According to Wintermute, under such conditions, Bitcoin outperforms alternative coins in 54% of cases. This explains why the recent rise of tokens like FIL, ICP, and FET was short-lived and quickly ended.
Analysts believe that for a sustainable altcoin rally, digital gold and Ethereum must take the lead. The current situation is not stagnation but a transitional phase. The next key factor for volatility will be news from the US related to regulation and policy, Wintermute concluded.