The crypto market is abuzz with expectations of an upcoming altcoin season, with many digital currencies able to capitalize on the current rally and in many cases, even outperform BTC.
Altcoin season may have to wait a while
In theory, an altcoin season begins when 37 of the top 50 altcoins surpass Bitcoin in terms of 90-day average growth.
Currently, the chart shows that 17 of the top 50 altcoins have surpassed Bitcoin, with SUI leading the way with an impressive 155% gain. Typically, altcoins move in tandem with Bitcoin, peaking when market sentiment towards BTC is bullish.
This is happening as investor confidence in Bitcoin spills over into the altcoin market, encouraging traders to seek higher returns from these alternative assets. History shows that Bitcoin halving years are often important starting points for a re-accumulation phase, which is often followed by a significant rally.
However, a steady accumulation process has yet to take shape, which will be crucial in determining the outlook for an altcoin season. Therefore, unless BTC retests its previous all-time high (ATH), altcoins may only see short-term gains.
Bitcoin plays a pivotal role
Contrary to popular belief, Bitcoin may be preparing for a price correction, which could potentially take it below $64K unless that level becomes support.
This correction would be the fourth pullback since BTC approached the $66K ceiling. Only when this threshold is crossed will the possibility of reaching an all-time high become clear.
As mentioned earlier, the criteria for an altcoin season depends heavily on Bitcoin’s initial move. When Bitcoin starts to accelerate, altcoins often follow this trend.
However, in the middle of the cycle, many altcoins often have higher daily growth than BTC. This could mark the beginning of an altcoin season, especially if many altcoins show good resistance to the expected BTC correction.
Therefore, it is important to keep a close eye on altcoins during this potential downturn. If the majority of altcoins maintain significant upward momentum, the possibility of entering an altcoin season at the end of the next cycle increases.
