Debating Bitcoin's 4% Dip: Is Altcoin Season on the Horizon?
Summary:
On February 20, Bitcoin experienced a 4% dip, leading traders to speculate about the state of the cryptocurrency market and the potential onset of an altcoin season. Market experts attribute the ongoing dip to being a phase in Bitcoin's halving cycle which could precede a post-halving rise. Despite altcoins showing immense growth over the past year, Bitcoin's year-to-date performance still surpasses the combined altcoin market cap. Predictions for the arrival of an altcoin season remain uncertain, with indicators proving ambiguous.
Bitcoin witnessed a considerable downturn on February 20, plunging almost 4% from the intra-day apex of $53,019 down to $50,812, placing the past week's gains at risk. This dip ignited discussions among traders, questioning the state of the cryptocurrency market and the probable onset of an altcoin season. Market experts and traders posit this continuing fall to be a phase in Bitcoin's halving cycle, with predictions of a pre-halving drop before a widely predicted post-halving rise.
The cryptotrader and data analyst Rekt Capital indicated in a February 15 post that Bitcoin is due for a final Pre-Halving Retrace before the uptrend resumes. Sjuul, a market analyst, signaled high funding rates for BTC, urging traders to brace for some correction and buying opportunities. Santiment, a market intelligence company, reported major activities in "mid-level" traders as clear signs for profit-taking and buying the dip.
Compared to Bitcoin, altcoins have shown immense growth over the past year, with some having double or triple digit gains and even outperforming Bitcoin. Bitcoin has soared 107% over the past year, while Solana has increased by 308%, Avalanche by 80%, and Chainlink by 136%, according to CoinMarketCap. However, on-chain analytics company Glassnode data reveals that Bitcoin's year-to-date performance surpasses the combined altcoin market cap.
Glassnode points out that despite Ethereum initially surpassing Bitcoin post the Bitcoin ETFs approval, by February 8, its performance dropped below Bitcoin's. Bitcoin remains dominant, experiencing nearly “$20B in capital inflows per month." The report suggests Bitcoin's commanding presence in the digital asset market, holding more than 52% market share.
Predicting the advent of an altcoin season is uncertain. Analyst Stockmoney Lizards proposed many altcoins are poised to skyrocket in the ensuing altcoin season based on altcoin market cap breaking through a critical support area. However, Glassnode's altcoin season indicator, despite showing positive movement since last October, indicates that an official altcoin season may still be some time away.
Blockchain Center data reveals merely 59% of the top 50 altcoins have outperformed Bitcoin over the past 90 days. It will need to exceed 75% to declare an altcoin season officially.
In conclusion, though there are definite signs of an altcoin season becoming evident, it may still be premature to confirm. Readers are advised to research thoroughly as investment and trading come with their risks.
Published At
2/21/2024 12:48:46 AM
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