Signs of Upcoming Altcoin Season Emerge Despite Bitcoin’s Strong Hold • crypto.ro
Key Points
On February 20, Bitcoin (BTC) saw a significant drop in value, falling by 4% from a high of $53,019 to a low of $50,812. This threatened to erase the gains made in the previous week.
This correction in Bitcoin’s value caused traders to reassess the overall state of the cryptocurrency market, sparking discussions about the potential arrival of the altcoin season, also known as ‘altseason’.
Reasons for Bitcoin’s Value Drop
Traders and market analysts are attributing the current price drop to the 5 phases of the Bitcoin halving cycle, suggesting that BTC might be in the midst of a pre-halving retrace. This is a period before the expected post-halving parabolic uptrend.
Crypto trader and analyst Rekt Capital posted a chart on February 15 suggesting that Bitcoin has “one last Pre-Halving Retrace left” before it resumes its uptrend.
Independent market analyst Sjuul warned that BTC’s funding rates were high, indicating a possible correction across the board. He described this as a potential “buy-the-dip” opportunity.
Market intelligence firm Santiment noted significant moves in “mid-tier traders often work as excellent signals for” profit taking and “dip buys.”
Santiment also pointed out that stablecoin holders with $10K to $100K added $44.3M in USDT in the past two weeks, indicating they might be preparing to buy the dip in case of a pullback.
Bitcoin vs Altcoins
Altcoins have performed impressively over the last year, with many posting double and triple-digit gains, and some even outperforming Bitcoin.
Data from CoinMarketCap shows that while Bitcoin has rallied 107% over the past 12 months, Solana (SOL) has gained 308%, Avalanche’s AVAX 80%, and Chainlink’s (LINK) 136%.
On-chain analytics firm Glassnode’s latest data shows that although “BTC and ETH are leading the pack, with year-to-date gains of 17.6% and 18.2%, respectively,” Bitcoin’s year-to-date performance surpasses the aggregate altcoin market cap.
Glassnode also points out that despite Ethereum (ETH) beginning to outperform BTC following the approval of the spot Bitcoin ETFs in January, its performance fell below Bitcoin’s on Feb. 8.
Glassnode further notes that Bitcoin continues to show dominance, seeing approximately “$20B in capital inflows per month at present.”
According to a report by Glassnode, “Bitcoin continues to lead with over 52% market share of the total digital asset market cap.”
Is the Altseason Near?
On February 18, independent analyst Stockmoney Lizards suggested on social media that many altcoins are about to skyrocket in the next altseason. He shared a chart showing that the altcoin market cap had scaled above a significant support area.
However, it might still be too early to confirm the arrival of the altcoin season. Glassnode’s altseason indicator has shown positive momentum since October last year and turned positive on Feb. 4.
Interestingly, the indicator has remained positive since then, suggesting that the market is now in a risk-on mode, showing the confidence that investors have in altcoins at the moment.
Blockchain Center data shows that only 59% of the top 50 altcoins have outperformed BTC during the last 90-day period. This percentage needs to move above 75% for an altseason to be declared.
Glassnode concludes, “our Altcoin Indicator suggests a more mature and possibly sustained uptick in Altcoin markets, however, it remains relatively concentrated in higher market cap assets at this time.”
This indicates that signs of an altcoin season are starting to emerge, but it may still be too early to definitively declare its arrival.
