The altcoin market is sending bullish signals, and recent data suggests that whales (investors who accumulate large amounts of a cryptocurrency) are positioning for a future upward movement that could lead to an altseason.

An analysis published by CryptoQuant reveals the massive and simultaneous outflow of altcoins from Binance, considered the largest cryptocurrency exchange in the world today.

Among the altcoins with the highest outflows are ETH, DOGE, and SHIB, which tend to be favorites among investors due to their history and relevance in the market. However, others such as ENJ, FET, GHST, SLP, GTC, LINK, ILV, 1INCH, CRV, SKL, ALICE, UMA, MKR, SNX, and AAVE also show a greater outflow than inflow.

According to this map, the redder the cryptocurrency's color, the higher the ratio of withdrawals to deposits. Source: CryptoQuant

This exchange exit pattern is a classic indicator of accumulation. When whales, or large investors, withdraw their assets from trading platforms, it implies that they don't intend to sell them in the short term, but rather seek to hold them for the long term, anticipating an increase in value. Less supply on exchanges tends to reduce selling pressure and can catalyze a price rally, provided demand remains stable or increases.

What is an altseason and why might it be coming soon?

An altseason is a period in which alternative cryptocurrencies (as cryptocurrencies other than Bitcoin are known) experience a significant and widespread increase in value, which can outperform BTC.

As for signs of a potential altseason approaching, in addition to what CryptoQuant mentioned above, there is also what analyst Axel Adler Jr. reported on, regarding the average monthly altcoin exchange flow, which stood at USD 1.6 billion as of June 27. This figure is below the annual average of USD 2.5 billion, and in previous cycles, when flows fell below this threshold, altcoin prices tended to rise sharply shortly after.

Ethereum network has been experiencing a significant increase in activity. According to data from Token Metrics, combining transactions per second on Ethereum and those processed across the entire L2 sector (second network layers) in a custom graph, more than 16 TPS are being processed, a figure not seen since April 2021.

The connection between the increase in Ethereum transactions and the altseason lies in the renewed institutional and retail interest in the network, now that the price of ETH is rising.