Is Altcoin Season Upon Us? Here’s What Bitcoin’s Performance Shows
There is reason to believe that the altcoin season is imminent based on Bitcoin’s recent price action. Altcoin season is known to be a period when other crypto tokens begin to outperform the flagship crypto token.
Bitcoin To Cool Off For Altcoin Season
Crypto analyst Rekt Capital stated in an X (formerly Twitter) post that Bitcoin has only one last Pre-Halving retrace before it goes on a parabolic move post-halving. Crypto analyst Sjuul also highlighted in an X post how the funding rate is “mildly high” for Bitcoin at the moment, something which hints that a correction was on the horizon.
With Bitcoin likely to face a significant correction, this presents the perfect opportunity for altcoins to make a run of their own. Ethereum, the second-largest crypto token by market cap, looks set to lead the pack, hitting $3,000 for the first time in nearly two years. Meanwhile, some analysts have noted indicators that confirm that the Altcoin season is not far off.
Crypto analyst Crypto Prof noted that the Gaussian channel on the Altcoins chart has turned green after almost 4 years. Also, these altcoins are said to have broken through the previous resistance from the last weekly close. Crypto Prof further stated that the same thing happened in 2016 and 2020, the period in which the Altcoin bull run started.
Stockmonkey Lizards, another crypto analyst, also mentioned on his X platform that the altcoin is close. In the accompanying chart on his post, he highlighted how the altcoin market cap was going to run to $10 trillion from its current market cap of almost $900 billion.
Investors Increasing Their Risk Appetite
On-chain intelligence platform Glassnode noted in a recent report that their Altseason Momentum indicator has shown a “growing appetite from investors to move capital further out on the risk curve.” This suggests that crypto investors are more willing to deploy a significant amount of their capital to altcoins in anticipation of greater returns.
Interestingly, this altcoin indicator is said to have signalled positive momentum since October 2023 before briefly cooling off during the sell-the-news event that occurred after the Spot Bitcoin ETFs approval. However, the indicator is once again signalling this positive momentum having been retriggered on February 4.
Glassnode further revealed that, while Bitcoin dominance remains significant, there are signs that capital is being rotated into other ecosystems like Ethereum, Solana, Polkadot, and Cosmos.
Data from Blockchain Center also shows that the market is gearing closer to an altcoin season. The altcoin season index currently stands at 61%, with a rise to 75% still needed before it can be said that the altcoin season is in full swing.
BTC dominance rises above 53% | Source: Market Cap BTC Dominance on Tradingview.com
Featured image from Bitcoinist, chart from Tradingview.com
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