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Experts Debate the Onset of Altcoin Season

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Experts Debate the Onset of Altcoin Season
  • While Bitcoin’s growth has slowed, Ethereum has nearly reached a two-year high at $3000. 
  • Many market participants predict the start of an altcoin season, though some remain cautious. 

As the second-largest cryptocurrency by market capitalization approached $3000, several industry analysts forecasted the onset of an altcoin season. 

Over the past week, Ethereum outperformed Bitcoin with a gain of 10% compared to 3.5%. 

Data: CoinGecko. 

While digital gold remains flat at $52,000, its closest competitor continues to show upward momentum. 

“The notion that Ethereum provides nothing and is only in a downtrend sounds cynical. This is still a huge period for transitioning from Bitcoin, but the upward momentum continues with Ethereum, not the first cryptocurrency,” said MN Trading founder Michaël van de Poppe.

Coinbase Senior Technical Manager Yuga Kohler noted that an “Ethereum bull market, [which is] a beta version for altcoins,” has begun.

According to economist and trader Mikybull Crypto, March has always been an optimistic month for Ethereum. He also predicted a “huge cycle of altcoin season.” 

Technical analyst Titan of Crypto shared a chart of the total market capitalization of altcoins, excluding the two largest cryptocurrencies.

The data presented indicates a breakthrough of the 38.2% Fibonacci level, which may signal the start of a bullish cycle.

Apollo Capital Director Henrik Andersson, in a conversation with Cointelegraph, identified several catalysts for the beginning of an altcoin rally. Upcoming events include the Dencun upgrade on the Ethereum mainnet, as well as the launch of the Blast L2 network and the EigenLayer restaking platform.

“Last year, Ether lagged behind Bitcoin. It seems it’s time for it to catch up, particularly due to the supply drop and deflation following the transition to the PoS algorithm,” Andersson added. 

Hasty Conclusions 

Despite positive signals, 10x Research head Markus Thielen believes there is no evidence of an altcoin season: 

“Although there are rumors of a possible alt-rally, the current situation lacks substantial evidence, as Bitcoin’s dominance remains at 51%.”

In his view, for an altcoin cycle to begin, “the dominance of the first cryptocurrency needs to fall below 45%.” He argues that unlike the “surges” during summer bull markets of ICO and DeFi, the current rise “lacks a notable narrative, aside from the influx of investments in Bitcoin ETFs.”

The analyst also noted that the recent altcoin rally ended quickly, with the catalyst for the current growth being news of Ethereum-ETH approval.

According to research by analytics firm Santiment, since the start of the positive movement in October, “the vast majority” of crypto projects have yielded profits in the medium and long term, except for a few lagging altcoins.

However, experts warned that the MVRV indicator points to “a large number of overbought signals.”

“This certainly does not mean that cryptocurrency is on the verge of a major correction. […] However, there is an above-average risk when buying or opening new positions, as markets are in the midst of a surge that has lasted more than four months,” analysts added. 

Earlier, Amberdata stated that the trend of Ethereum’s price growth outpacing Bitcoin could continue due to a more constructive deflationary policy. 

In January, analysts at QCP Capital predicted Ethereum’s dominance in the medium term, as market participants await the approval of a spot ETF based on the asset in the US. 

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