- According to analysts, Ethereum’s price increase and transaction speed herald the start of an altcoin season.
- Chainlink is showing strong growth with increasing active addresses and open interest, indicating bullish sentiment.
Ethereum [ETH] has recently demonstrated its strength as the second largest cryptocurrency by market capitalization, with notable gains. Over the past 24 hours, ETH has risen almost 10%, reaching a trading price of $3,374 at the time of writing.
While still about 30% below the 2021 all-time high of $4,878, the recent rally signals potential bullish activity in the broader altcoin market.
Amid these achievements, CryptoQuant analyst Mac.D marked the start of an altcoin season in a post on the QuickTake platform. The analyst pointed to Ethereum’s circulating speed and transaction growth as indicators of this rally.
The Altcoin season begins
Velocity, which measures how quickly coins circulate in the market by dividing annual coin movement by total supply, has historically increased during rallies in the altcoin market.
Source: CryptoQuant
Despite currently low speed levels of around seven times total supply, Ethereum’s role as primary collateral remains ahead institutional investors is ready to play a crucial role.
The analyst highlighted that a rise in the price of ETH could boost DeFi liquidity and confirm the start of an altcoin season.
Ethereum’s recent gains come in the context of a broader story. While Bitcoin has surpassed Ethereum in recent rallies, Ethereum’s role as a backbone for DeFi and a top choice for institutional collateral positions it for substantial influence.
However, challenges such as competition from faster and cheaper blockchain networks such as Solana, Tron and Aptos highlight the hurdles Ethereum must overcome. But as Ethereum’s transaction growth and speed improve, it is expected to drive liquidity creation, which will benefit the altcoin ecosystem.
LINK as a case study
A closer look at one of the prominent altcoins, Chainlink, supports the altcoin season thesis. LINK has registered a 16.6% increase over the past week, bringing its trading price to $15.26.
This growth matches Ethereum’s rising activity and signals broader altcoin momentum. Key statistics support this case: LINK’s active addresses – a measure of retail interest – have also roseAccording to Glassnode, the number has increased from less than 2,000 in October to more than 5,000 on November 21.
Source: Glassnode
Read Ethereum’s [ETH] Price forecast 2024–2025
The argument for an altcoin season is further strengthened by Chainlink’s derivatives facts also shows bullish signs. Data from Coinglass indicates a 7.76% increase in LINK’s open interest, now valued at $294.88 million.
Source: Coinglass
Additionally, LINK’s open interest volume increased 0.86% to $726.97 million. These figures indicate increased investor activity and confidence in LINK’s near-term performance.
Credit : ambcrypto.com
