- Altcoin season has captured market attention as Bitcoin breaks past $64K.
- However, for this season to fully materialize, several conditions must align.
As Bitcoin [BTC] approaches a market top, many altcoins are poised for a surge, driven primarily by investors seeking to diversify their portfolios and mitigate risk.
As a result, the crypto market is buzzing with the prospect of an impending altcoin season, where numerous coins are anticipated to capitalize on the recent momentum and, in many instances, outperform BTC.
Altcoin season may have to wait a little longer
Theoretically, an altcoin season begins when 37 of the top 50 altcoins outperform Bitcoin over a 90-day average.
Currently, the chart shows 17 of the top 50 altcoins surpass Bitcoin, with SUI leading the way with an impressive 155% surge. Typically, altcoins move in tandem with Bitcoin, reaching local highs when the sentiment around BTC is bullish.
This occurs as investor confidence in Bitcoin often spills over into the altcoin market, encouraging traders to seek higher returns in these alternative assets.
Source : Bitcoin Magazine Pro
Historically, halving years have marked significant beginnings for the re-accumulation phase for Bitcoin, typically followed by a blow-off top.
However, a solid accumulation is yet to materialize, which will be essential for establishing the prospects of an altcoin season. Therefore, unless BTC retests its ATH, altcoins may only achieve short-term gains.
A lot hinges on Bitcoin
Contrary to popular belief, AMBCrypto suggests that Bitcoin may be poised for a price correction, likely pulling it back below $64K unless this level flips into support.
This correction would represent the fourth potential retracement since BTC last approached the $66K ceiling. Only after breaking this barrier will the possibility of reaching an all-time high materialize.
Source : TradingView
As mentioned earlier, the criteria for an altcoin season largely depends on Bitcoin’s initial movement. Once Bitcoin gains momentum, altcoins typically follow suit.
However, by the mid-cycle, many altcoins often post higher daily gains compared to BTC. This would signal the start of an altcoin season, especially if more altcoins demonstrate resilience against the anticipated BTC correction.
Therefore, it’s crucial to closely monitor altcoins during this potential downturn. If most altcoins ride the wave with significant gains, the chances of entering an altcoin season by the end of the next cycle may increase.
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