There is reason to believe that the altcoin season is imminent, based on Bitcoin’s recent price action. It is known that the Altcoin season is a period when other crypto tokens are starting to outperform the flagship crypto token.
Bitcoin to cool down for Altcoin season
Crypto analyst Rekt Capital puts in an X (formerly Twitter) after that Bitcoin only has one last pre-halving retracement before it goes parabolic post-halving. Crypto analyst Sjuul also emphasized this in an X message how the funding rate for Bitcoin is “mildly high” right now, something that suggests a correction is on the horizon.
Of Bitcoin probably have to deal with a significant correction, this presents the perfect opportunity for altcoins to make their own run. Ethereum, the second largest crypto token by market capitalization, looks set to lead the pack. Get $3,000 for the first time in almost two years. Meanwhile, some analysts have noted indicators that confirm that Altcoin season is not far away.
Crypto analyst Crypto Prof noted that the Gaussian channel on the Altcoins chart has turned green after almost 4 years. These altcoins would also have broken the previous resistance from the last weekly close. Crypto Prof further stated that the same thing happened in 2016 and 2020, the period when the Altcoin bull run started.
Stockmonkey Lizards, another crypto analyst, too named on its X platform that the altcoin is close. In the accompanying chart to his post, he highlighted how the altcoin market cap would reach $10 trillion, compared to the current market cap of almost $900 billion.
Investors are 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 up the risk curve.” This suggests that crypto investors are more willing to invest a significant portion of their capital in altcoins in anticipation of greater returns.
Interestingly, this altcoin indicator is said to have signaled positive momentum since October 2023, before briefly cooling off during the sell-the-news event which took place after the Discover the approval of Bitcoin ETFs. However, the indicator once again shows that this positive momentum was reactivated on February 4.
Glassnode further revealed that while Bitcoin’s dominance remains significant, there are signs of capital being rotated into other ecosystems such as Ethereum, Solana, Polkadot and Cosmos.
Facts from Blockchain Center also shows that the market is getting closer to an altcoin season. The altcoin seasonal index currently stands at 61%, with another increase to 75% 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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