Altcoins
Data Signals Impending Altcoin Season Amid Continued Bitcoin Dominance
Last updated: February 21, 2024, 11:51 AM EST | 2 minutes of reading
Several analysts from microblogging platform
On February 15, trader/analyst Rekt Capital (@RektCapital) shared a projections chart suggesting that Bitcoin’s current decline could be part of a final “retrace” or consolidation period before the halving on April 19 .
As Bitcoin bootstraps the entire market due to its popularity, it is likely to take the largest altcoins by market capitalization to new heights.
Only one last retracement remains before the halving (dark blue circle)$BTC #Crypto #Bitcoin pic.twitter.com/Q6qF1ieEEL
– Rekt Capital (@rektcapital) February 15, 2024
In another recent tweet, Bitcoin fan and independent analyst Stockmoney Lizards (@StockmoneyL) believes he sees bullish trends in the altcoin’s market cap metrics. If history repeats itself, this could evolve into a potential 10x increase, the analyst suggested.
A lot #Altcoins are about to skyrocket next time #Altseason. We are close. pic.twitter.com/1uvRQdWqzU
– Stockmoney Lizards (@StockmoneyL) February 18, 2024
Market analysis conducted by Santiment on Tuesday suggests that retail traders have recently purchased a large portion of the dollar-pegged stablecoin Tether. Given that stablecoins are a blockchain-native way to use dollars to buy cryptocurrencies, the move could signal retail readiness to buy the current dip.
🤑 Small moves by mid-level traders often work as great signals to spot market pivots among the crowd. Over the past 2 weeks, #stablecoin holders with $10,000 to $100,000:
📈 Added $44.3 million $USDT
📉 Lost $20.6 million in $USDC🔗 Link to explore our grid: https://t.co/5AfbILqe1F pic.twitter.com/82RhKnqXzI
–Santiment (@santimentfeed) February 20, 2024
Finally, independent analysis from altcoin fan Sjuul (AltCryptoGems) stated that several top altcoins have the same funding rate as Bitcoin, indicating a market correction, or as he calls it, a “buying opportunity on the decline “.
The financing rate is slightly high for $BTCand especially for certain alts.
We could therefore expect a widespread correction. In my opinion, this is the dip buying opportunity we are all looking for. pic.twitter.com/8J1Sf3uo8J
—Sjuul | AltCryptoGems (@AltCryptoGems) February 20, 2024
However, a real-time chart offered by the Blockchain Association suggests that Altseason is not there yet. The Blockchain Association is an American crypto trade group that lobbies Washington for clear and flexible crypto regulation.
According to his Altcoin Season Index, the current altcoin market score is 59, which means that only 59% of major altcoins outperform Bitcoin. Altseason arrives when the figure is 75 or more, specifies the Association. Bitcoin season refers to when only 25% of the top alternative cryptocurrencies outperform the market leader.
The Effect of Bitcoin Halving on Altcoin Season
When Bitcoin does well, everyone does well. Historical patterns suggest that Bitcoin’s halving could lead to market-wide gains, but we’re looking at a crypto landscape unlike any that has come before. Today, there is increased regulatory oversight. The recent launch of Bitcoin investment products approved by the US SEC further complicates the story.
Halving refers to a four-yearly event predetermined by Bitcoin code that cuts miner rewards in half. Miners use power-intensive hardware to crack cryptographic codes to validate groups of transactions called “blocks.” Confirming a block rewards the miner with new Bitcoins, some of which they will hold and some of which they will release to the market.
Block mining initially paid 50 Bitcoins when the network launched in 2009. Today, that figure is 6.25, and after April 19, it will be 3.125 BTC.
Halving has historically caused crypto rallies. Indeed, the restricted supply of new Bitcoins must meet a constant demand for the number one cryptocurrency. In other words, when supply is cut in half but demand remains the same, prices increase.
Recent analysis from asset manager Fidelity, which issues the second-largest regulated spot Bitcoin investment product on the market, suggests that the price of Bitcoin needs to reach $80,000 on halving day to keep mining income the same for all miners. If it does not do so, some miners will inevitably operate at a loss.