Bitcoin Leads Crypto Surge:
Bitcoin has been at the forefront of the cryptocurrency surge this year, yet analysts are suggesting that soon, alternative cryptocurrencies, or altcoins, might take the lead.
BTC, the largest and most established cryptocurrency, has been spearheading the recent surge in digital asset prices. However, there are indications that a phenomenon known as “altcoin season” could be on the horizon, wherein smaller tokens outshine the market leaders.
BTC has been rapidly approaching its all-time high set in 2021, reaching $64,000 this week, buoyed by robust inflows into spot bitcoin ETFs. Since the beginning of the year, it has surged by 48%. In contrast, the broader CoinDesk 20 Index (CD20) has only risen by 33% during the same period, highlighting the relatively subdued performance of altcoins.
According to analysts at K33 Research, this dynamic might soon change. “Judging by history, altcoins will start outperforming about the time we are now,” stated K33 in a recent market report. The report highlighted that since the market bottom in November 2022, bitcoin’s market cap has doubled concerning the total value of all cryptocurrencies excluding BTC and ether (ETH). This setup resembles the conditions seen in late 2020 before altcoins began to catch up with BTC’s rally.
Indications of an Impending Altcoin Season:
The recent surge in meme coins could be an early indication of the impending altcoin season, the analysts added. Notably, dog-themed tokens like dogecoin (DOGE) and shiba inu (SHIB) recorded gains of 40%-50% this week, while newer entrants such as pepe coin (PEPE), bonk (BONK), and dogwifhat (WIF) more than doubled in price during the same period.
However, the report cautioned that predicting the timing of the altcoin season is fraught with risk. The emergence of bitcoin ETFs has reshaped the crypto investment landscape, and there’s no guarantee that the capital flowing into bitcoin will eventually filter down to smaller assets. “There is enough risk appetite to send a select few alts on big runs, but we have yet to see a new wave of retail entering the altcoin arena to create the rising tide that lifts all boats,” noted K33.
Watch ETH for alt season conformation
In a recent market update provided by Swissblock analysts, indications strongly suggest the impending arrival of an “alt season.”
As per a chart disseminated on Telegram, the median return of altcoins compared to bitcoin seems to be nearing a trough and could potentially reverse direction soon. This reversal would likely lead to an increase in altcoin prices relative to BTC. Swissblock highlights that the key signal to monitor for confirming the commencement of a phase where altcoins outperform is Ethereum (ETH) surpassing the $3,500 price threshold.
