- Altcoin season has captured the market’s attention as Bitcoin breaks past $64K.
- However, in order to fully realize this season, various conditions must be aligned.
Like Bitcoin [BTC] is approaching a market top, many altcoins are poised for a surge, driven mainly by investors looking to diversify their portfolios and limit risk.
As a result, the crypto market is buzzing with the prospect of an impending altcoin season, with numerous coins expected to benefit from the recent momentum and in many cases outperform BTC.
The Altcoin season may have to wait a little longer
Theoretically, an altcoin season begins when 37 of the top 50 altcoins outperform Bitcoin on an average of 90 days.
Currently the graphic shows that 17 of the top 50 altcoins surpass Bitcoin, with SUI leading the way with an impressive 155% increase. Typically, altcoins move along with Bitcoin and reach local highs when sentiment around BTC is bullish.
This happens because 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, the halving years have been an important start to the reaccumulation phase for Bitcoin, typically followed by a breakout.
However, solid accumulation is yet to occur, which will be key to establishing the prospects of an altcoin season. Therefore, altcoins can only make short-term gains unless BTC retests its ATH.
A lot depends on Bitcoin
Contrary to popular belief, AMBCrypto suggests that Bitcoin may be poised for a price correction, which will likely push the price back below $64,000 unless this level turns into support.
This correction would represent the fourth potential retracement since BTC last approached the $66,000 ceiling. Only after this barrier is broken will the possibility of reaching an all-time high become a reality.
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, mid-cycle, many altcoins often post higher daily gains compared to BTC. This would mark the start of an altcoin season, especially if more altcoins show resilience against the expected BTC correction.
That’s why it’s crucial to keep a close eye on altcoins during this potential recession. If most altcoins ride the wave with significant gains, we may be more likely to enter an altcoin season towards the end of the next cycle.