[Analysis] "Stablecoin liquidity is on the rise...Signaling the possibility of an altcoin season"

An analysis has emerged suggesting that an 'altcoin season,' meaning a rally of altcoins (cryptocurrencies other than Bitcoin), may be on the horizon. This is attributed to a sharp surge in the market capitalization of stablecoins (cryptocurrencies pegged to fiat currencies) in circulation.

On the 16th (KST), a CryptoQuant on-chain contributor reported in a paper that "on-chain data is showing early signs of an altcoin season."

He focused on stablecoin supply. The contributor said, "The total supply of ERC20 stablecoins has reached an all-time high of $128.7 billion, indicating a large amount of liquidity building up and ready to flow into risk assets," and, "For the first time in history, the number of active stablecoin addresses has exceeded 250,000."

A continued net inflow of stablecoins into Binance, the world's largest cryptocurrency exchange, has also been encouraging. The contributor noted, "The net inflow chart for stablecoins into Binance has remained positive for the past several weeks," adding, "An increase in net inflow to exchanges signals growing purchasing power on standby."

Bitcoin (BTC) dominance also hinted at an altcoin season. The contributor emphasized, "Bitcoin dominance has been blocked by the resistance level formed during the previous bull cycle," and, "Such patterns have often coincided with periods when funds move from Bitcoin to mid- to large-cap altcoins and have been interpreted as early to mid-stage signals for an altcoin season." He added, "Supporting this, the number of active Ethereum addresses has surged to over 450,000, nearing cycle highs, suggesting that an altcoin season led by Ethereum may be approaching."