Altcoin Season: Is it Finally Here?

Numerous analysts on microblogging platform X have recently pointed out various data points suggesting that the altcoin season (altseason) may be approaching.

Altcoin Season Coming Soon as Bitcoin Dominance Holds Steady

Tim Hakki
Last updated: February 21, 2024 11:51 EST | 2 min read

Altcoins could rally off the back of Bitcoin

Several analysts on microblogging platform X have recently highlighted different data points indicating that altcoin season (altseason) could soon be upon us.

On February 15, trader/analyst Rekt Capital (@RektCapital) shared a projections chart to suggest that Bitcoin’s current dip could be part of a final “retrace” or consolidation period before the halving on April 19. Since Bitcoin bootstraps the entire market by virtue of its popularity, it’s likely to piggyback the biggest altcoins by market capitalization to new heights.

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🔗 Rekt Capital tweet

In another recent tweet, Bitcoin fan and independent analyst Stockmoney Lizards (@StockmoneyL) thinks he sees some bullish cup-and-handle patterns in the altcoin market’s capitalization metrics. If history repeats itself, this could be mounting towards a potential 10x bull run, the analyst implied.

🔗 Stockmoney Lizards tweet

Market analysis by Santiment on Tuesday suggests retail traders bought a lot of the dollar-pegged stablecoin Tether lately. Since stablecoins present a blockchain-native way to use dollars to buy crypto, the move could signal retail’s readiness to buy the current dip.

🔗 Santiment tweet

Finally, independent analysis by altcoin fan Sjuul (AltCryptoGems) said that several leading altcoins have the same funding rate as Bitcoin, indicating a market correction, or as he calls it, a “buy-the-dip opportunity.”

🔗 Sjuul tweet

However, a real-time graph offered by the Blockchain Association suggests that Altseason is not here yet. The Blockchain Association is a US crypto trade group that lobbies Washington for clear and flexible crypto regulation. According to its Altcoin Season Index, the altcoin market’s current score is 59, meaning only 59% of the leading altcoins are outperforming Bitcoin. Altseason arrives when the figure is 75 or above, says the Association. Bitcoin season refers to when only 25% of the leading alternative cryptocurrencies are outperforming the market leader.

Source: The Blockchain Association

The Bitcoin Halving’s Effect on Altcoin Season

When Bitcoin does well, everybody does well. Historical patterns suggest that Bitcoin’s halving narrative could lead to market-wide gains, but we’re looking at a different crypto landscape than any that came before. Nowadays, there is increased regulatory scrutiny. The recent launch of US SEC-approved Bitcoin investment products further complicates the narrative.

The halving refers to a quadrennial event predetermined by Bitcoin’s code which cuts miners’ rewards in half. Miners use energy-intensive hardware to break cryptographic codes to validate groups of transactions called “blocks.” Confirming a block rewards the miner with new Bitcoin, some of which it will hold and some of which it will release onto the market.

Block mining initially paid 50 Bitcoins on the network’s launch in 2009. Today that figure is 6.25, and after April 19, it will be 3.125 BTC.

The halving has historically caused crypto rallies. This is because the constricted supply of new Bitcoins has to meet a consistent demand for the number one cryptocurrency. In other words, when supply is cut in half but demand remains the same, the price goes up.

Recent analysis by asset manager Fidelity, which issues the second-largest regulated spot Bitcoin investment product on the market, suggests that Bitcoin’s price needs to hit $80,000 by the day of the halving for mining revenue to stay the same for all miners. If it doesn’t do so, some miners will inevitably be operating at a loss.

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Q&A: Your Questions Answered

Q: How does altcoin season affect the overall crypto market? Altcoin season typically refers to a period where alternative cryptocurrencies, other than Bitcoin, experience significant price increases. This phenomenon occurs when investors shift their focus and capital from Bitcoin to other cryptocurrencies. When altcoin season is in full swing, the entire crypto market tends to experience heightened enthusiasm and increased trading volume.

Q: Are there any altcoins to keep an eye on during this potential altcoin season? While it’s difficult to predict which specific altcoins will perform well during an altcoin season, it’s worth paying attention to altcoins with strong fundamentals, innovative technologies, and active development teams. Some popular altcoins to watch in recent times include Ethereum, Ripple, Litecoin, and Cardano. However, thorough research and due diligence are essential before making any investment decisions.

Q: How can the Bitcoin halving affect the altcoin market? The Bitcoin halving is expected to have a positive impact on the altcoin market. Historically, the halving event has driven increased interest and investment in the overall cryptocurrency market. As Bitcoin’s price rises in response to the halving, investors may look to diversify their portfolios by exploring alternative cryptocurrencies, leading to potential gains in the altcoin market.

Q: What risks should investors be aware of during an altcoin season? Investors should be aware of the inherent volatility and speculative nature of the altcoin market. While altcoin season can present profitable opportunities, rapid price fluctuations and market sentiment can lead to substantial losses if not approached with caution. It’s crucial to set clear investment goals, conduct thorough research, and diversify investments to manage potential risks effectively.

Looking to the Future

As we approach Bitcoin’s halving, the crypto market is buzzing with excitement and anticipation. The potential for altcoin season looms, with various indicators suggesting a possible surge in altcoin prices. While the current Altcoin Season Index may not indicate the start of altseason just yet, market conditions can change rapidly.

If history is any indication, the halving event could trigger a new wave of interest and investment in the crypto space. As always, it’s crucial to stay informed, keep up with the latest developments, and make informed investment decisions.

In the meantime, keep an eye on Bitcoin’s price movements and market sentiment. And remember, the crypto market is a thrilling rollercoaster ride best enjoyed with a mix of caution and enthusiasm!

References

• Rekt Capital tweet
• Stockmoney Lizards tweet
• Santiment tweet
• Sjuul tweet
• Altcoin Season Index
• Follow Us on Google News

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