Although Bitcoin's market share remains strong at over 52%, data and technical data indicate that altcoin season is approaching.
Bitcoin saw a sharp correction on February 20, with the price falling 4% from a high of $53,019 to a low of $50,812, erasing the gains made over the past seven days.
The decline in the price of Bitcoin has traders reevaluating the overall health of the cryptocurrency market. Which raises debate about whether altcoin season has arrived or not?
What causes the price of Bitcoin to fall?
Traders and market analysts believe that this decline is part of the five stages of the Bitcoin halving, and BTC may face a pullback before the Bitcoin halving in order to enter a full bullish wave.
Cryptocurrency trader and analyst Rekt Capital shared the following chart in a February 15 post on the social media platform “just once” before turning back to the upside again.
Independent market analyst Sjoll notes that Bitcoin (BTC) funding rates are high. It is a warning to traders to “prepare for a market-wide correction.”
“In my opinion this is an opportunity to buy when the price goes down (buy the dip) that we have been waiting for.
Market research firm Santiment notes significant moves made by “a group of mid-level traders. This is often an excellent signal to 'take profits' and 'buy on the downside'.”
“Over the past two weeks, stablecoin holders holding between $10,000 and $100,000 have increased $44.3 million in USD.”
This may be a sign that they are preparing to “buy the dip” in case the market temporarily declines (pullback)
Bitcoin vs altcoins
Altcoins have shown excellent performance over the past 12 months. By achieving double and triple profits. Many currencies have outperformed Bitcoin, and some have seen significant growth in a short period of time.
Data from CoinMarketCap reveals that over the past 12 months, Bitcoin is up 107%, while altcoins like Solana (SOL) are up 308%, Avalanche (AVAX) is up 80%, and Chainlink (LINK) is up 136%. .
Recent data from on-chain analytics firm Glassnode notes that though “BTC and ETH lead the pack, with annual gains of 17.6% and 18.2%, respectively.” But Bitcoin's year-to-date (YTD) growth still outpaces the total market cap of altcoins.
“The total market cap of altcoins has not performed as well as Bitcoin and Ethereum, with year-to-date altcoin growth being less than half that of the two major coins,” said Alice Cohen, an analyst at Glassnode.
Glassnode noted that Ethereum (ETH) has outperformed Bitcoin (BTC) following the approval of the Spot Bitcoin ETF in January. But ETH yield fell below BTC on February 8th.
According to Glassnode, the performance of digital assets can be tracked using the maximum achieved for each block. It is an indicator that “collects the base cost value of all the coins transferred on the chain.”
Glassnode notes that Bitcoin continues to show prominence, with “capital inflows of around $20 billion per month,” as the chart below shows. Bitcoin's market dominance continues to grow. Its relative market value has increased by 1,000% since October 2023.
“The report notes that money has moved down the risk curve into altcoins at a slower rate than the sell-off between the two major currencies. This trend appears to be repeating itself, and Bitcoin continues to lead. It holds more than 52% of the market share of all digital assets.”
Is Altison approaching yet?
On February 18, independent analyst Stockmoney Lizards told his followers on the social media platform
Analysts shared charts showing that the total altcoin market cap (altcoin market cap) has risen above key support areas. It is entering an uptrend, similar to the period when altcoin prices rose 10x in 2021.
“We're almost there.”
Glassnode indicators for altcoin season have shown a good trend since October last year. It just returned to positive status on February 4 after being interrupted during a news selling event. “News selling” driven by approval of Bitcoin ETFs in January
The interesting thing is the indicators have remained positive since then. This indicates that the market is in risk mode, which reflects investors' confidence in altcoins at the moment.
Data from the Blockchain Center indicates that over the past 90 days, only 59% of the top 50 altcoins have outperformed Bitcoin, although this indicator could rise over the course of a few days. But it is not enough to declare it an alternative season, because in order for it to be declared an alternative season, this number must exceed 75%.
Glassnode concludes that our altcoin indicators point to an upward trend for a more mature and potentially sustainable altcoin market, however, at the moment, the altcoin market remains primarily concentrated in assets with higher market caps. This means signs of altcoin season are showing, but it may be too early to draw firm conclusions.
source: Cointelegraph
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